What Is Temporary Authority and How Will It Affect People Applying for an MLO License?

As you may know, if an MLO goes to work for a mortgage company (aka Independent Mortgage Banker and not a depository mortgage lender), they must get a license. The process includes education and testing requirements. For MLOs moving from a bank to non-bank, this creates a problem. The license application is required by the state to be approved before ANY loan origination activities can occur including the testing and education. Even if the MLO has originated for say 20 years at a bank, he or she has to stop until they state approves the license. Customers, referral sources, friends and family all have to wait. (You may have heard of transitional licensing as its been proposed several times over the past sveeral years). So what’s the change?

Temporary authority was part of S2155 and was signed into law. It takes effect on November 24, 2019.

What does it say?

An MLO who is transitioning from a bank and is originating, can apply and get approval, originate and has 120 days to complete the testing and education requirements.

Also, a licensed MLO that wants to add a new state can do so and also has the 120 days.

In short, the approval will be very fast… maybe a day or two and based on the state unless they see a reason that they should deny it.

The MLO must complete all of the requirements and if they do not then must stop originating at 120 days unless the state is the hold-up.

In that case, the MLO could continue.

What does this mean? Fewer restrictions for the MLO and easier to move to the best opportunity.

More here: https://mortgage.nationwidelicensingsystem.org/NMLS%20Document%20Library/FAQs%20S.2155%20Temporary%20Authority%20to%20Operate.pdf

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