Updated 04/26/23
Amendments to the Licensee’s NMLS record are requested through NMLS. Amendments and associated fees include:
Your MLO license expires December 31 of each year and must be renewed on or before December 31 of each year. Approval of the renewal request is granted if all requirements are complete. Renewal requirements include:
All companies holding a Michigan mortgage license or registration, and companies employing Michigan licensed MLOs, must complete the NMLS Mortgage Call Report on a quarterly calendar basis. The NMLS Mortgage Call Report is a single report of condition that reflects the entire mortgage activity and financial information for a company. Although your sponsoring company will compile this information and report it as required through NMLS, you are required to maintain mortgage loan originator business information.
Every Michigan licensed MLO is required to complete at least 8 hours of NMLS approved continuing education annually.
(Exception: MLOs who complete pre-licensure education are not required to take continuing education that year.)
Courses are scheduled through NMLS and must include:
To carry out the purposes of investigations and examinations, licensed MLOs shall create or compile reports or prepare other information requested by the Director when instructed to do so. MLOs will, at a minimum, be asked to report the number and dollar amount of loans originated in the preceding calendar year.
These items include, but are not limited to:
If you have any questions regarding the above items, please contact the Consumer Finance Licensing Unit at 877-999-6442.
The NMLS Call Center is available to answer any of your questions related to system operations at 1-855-NMLS 123 (1-855-665-7123).
The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) is a federal statute that was signed into law on July 30, 2008. In part, it sets minimum standards for the following: mortgage loan originator state licensing and regulation; uniform license applications and reporting requirements; a comprehensive licensing database; and the registration of mortgage loan originators employed by federal depository institutions and their subsidiaries.
Yes. A SAFE Act Final Rule was promulgated with an effective date of August 29, 2011. This Rule was promulgated to clarify interpretations of the SAFE Act, and has the same effect as law.
The Mortgage Loan Originator Licensing Act (MLOLA) is the Michigan statute that became effective on July 31, 2009 to bring Michigan into compliance with the federal SAFE Act. It gives the Director of the Department of Insurance and Financial Services (DIFS) certain powers to license, examine, and regulate mortgage loan originators doing business in Michigan.
The MLOLA is the Michigan statute enacted in conformance with the SAFE Act. The SAFE Act sets minimum standards for individual state statutes, including Michigan’s.
Individual state statutes may be stricter than the SAFE Act. For example, the SAFE Act prescribes a 7-year period previous to the date of license application in which a mortgage loan originator license shall not be issued to an individual who has been convicted of a felony. The MLOLA prescribes a stricter 10-year period.
Under both the SAFE Act and MLOLA, a “residential mortgage loan” is similarly defined to mean any loan primarily for personal, family or household use that is secured by a mortgage, deed of trust or other equivalent consensual security interest on a dwelling or on land on which a person intends to construct a dwelling. A “dwelling” is defined as a residential structure or mobile home which contains one to four family housing units, or individual units of condominiums or cooperatives.
No. Although the definitions are similar, the MLOLA includes loans secured by mobile or manufactured homes, while the MBLSLA does not include these transactions unless the home is affixed to real property.
Yes. A purchase-money mortgage is a mortgage given by the buyer of property to the seller, to secure the balance of the purchase price with the property being sold. Origination of a purchase-money residential mortgage loan is subject to MLOLA requirements.
Yes. HUD’s response to public comments on the SAFE Act Final Rule clearly states that “residential mortgage loans” include installment sales contracts (i.e., land contracts).
“Originate” means, for compensation or gain or the expectation of compensation or gain, taking a residential mortgage loan application or offering or negotiating the terms of a residential mortgage loan.
The SAFE Act Final Rule states that not every person who acts as a “loan originator” must be licensed, but licensure is required for those persons who “engage in the business” of loan origination.
The Final Rule states that an individual is engaged in the business of a mortgage loan originator if he or she habitually or repeatedly in a commercial context: *
Use of the term “commercial” in this instance does not mean commercial real estate. The SAFE Act Final Rule defines “commercial context” as activity for the purpose of obtaining anything of value for himself or herself, or for an entity or individual for which the individual acts, rather than exclusively for public, charitable or family purposes.
The SAFE Act Final Rule defines “offers or negotiates terms for compensation or gain” as follows:
“(1)(A) Presents for consideration by a borrower or prospective borrower particular residential mortgage loan terms;
(B) Communicates directly or indirectly with a borrower, or prospective borrower for the purpose of reaching a mutual understanding about prospective residential mortgage loan terms; or
(C) Recommends, refers, or steers a borrower or prospective borrower to a particular lender or set of residential mortgage loan terms, in accordance with a duty to or incentive from any person other than the borrower or prospective borrower, and
(2) Receives or expects to receive payment of money or anything of value in connection with the activities described above or as a result of any residential mortgage loan terms entered into as a result of such activities.”
(The Safe Act Final Rule refers to this as a de minimis exemption.)
No, such an exemption does not exist. Generally, origination of one residential mortgage loan requires licensure under the MLOLA. However, certain loan origination transactions may be exempt from the licensure requirements of the MLOLA as discussed below. In addition, the SAFE Act Final Rule provides limited licensing exceptions for certain transactions. Please review all of the Mortgage Loan Originator and Seller Financing FAQs below to determine if you qualify for a limited licensing exemption.
The SAFE Act Final Rule states that a mortgage loan originator license is not required for the following non-seller financing transactions:
DIFS has taken the position that origination of the above-mentioned transactions generally does not require licensure under the MLOLA, in accordance with the SAFE Act Final Rule.
* “Seller financing” is defined later in this document.
“Bona-fide nonprofit organization” under the SAFE Act Final Rule means an organization that demonstrates to the satisfaction of the applicable regulator that the organization meets all of the following:
Seller financing is the activity of an individual or entity that owns and subsequently sells a dwelling subject to the MLOLA, which is financed by the seller through a residential mortgage loan as defined by the MLOLA.
The SAFE Act Final Rule, or HUD’s response to public comments on the Rule, states that a mortgage loan originator license is not required for the following seller financing transactions provided that such activity is not habitual:
DIFS has taken the position that origination of the above-mentioned transactions does not require licensure under the MLOLA unless the number or frequency of the transactions indicates that the individual appears to be engaged in the business of mortgage loan origination. As discussed in the next FAQ, DIFS will presume that an individual is “engaged in the business” of origination if four or more transactions are originated in a calendar year.
Mortgage loan origination involving a residential mortgage loan as defined by the MLOLA for personal, family, or household purposes on a dwelling located in the state of Michigan generally subjects the seller to the licensing requirements of the MLOLA. However, certain seller financing transactions may not require licensure under the MLOLA, as discussed in the next FAQ.
No, such an exemption does not exist. However, the SAFE Act Final Rule states that an individual generally is not “engaged in the business of a loan originator” when an individual acts as a loan originator in providing financing for the sale of a property owned by that individual, provided the individual does not engage in such activity with habitualness.
In considering whether activity is “habitual,” DIFS will generally apply the following standard. Unless other evidence to the contrary indicates that an individual is “engaged in the business” of loan origination, during a 12-month period from January 1 to December 31, an individual will not be considered to be engaged in the business of mortgage loan origination if the individual is not engaged in any activity under the MLOLA except seller financing transactions AND the individual originates three or fewer seller financed mortgage loan transactions. If four or more transactions are originated within such 12-month period, DIFS will presume the individual is “engaged in the business” and licensure as a mortgage loan originator is therefore required. Note that under the MLOLA, a mortgage loan originator must be a natural person.
A real estate broker or salesperson who does not engage in the business of a mortgage loan originator is not required to be licensed as a mortgage loan originator.
A real estate broker or salesperson who acts as a mortgage broker only in connection with a real estate sale and acts without additional compensation beyond the customary commission on the real estate sale, is not required to be licensed as a mortgage loan originator.
A real estate broker or salesperson is required to be licensed as a mortgage loan originator if he or she is compensated for the origination of the mortgage loan (i.e., fees in excess of the normal real estate commission are charged for handling a seller financing transaction). Under Section 3(l)(ii) of the MLOLA, MCL 493.133(l)(ii), individuals performing real estate brokerage or salesperson activities are exempt from the definition of a mortgage loan originator “… unless the person or entity is compensated by a lender, a mortgage broker, or other loan originator or by any agent of such lender, mortgage broker, or other loan originator.”
If the real estate broker or salesperson receives no additional compensation beyond the customary commission on the real estate sale, a license under the MLOLA or MBLSLA is not required for that transaction.
If the real estate broker or salesperson receives additional compensation beyond the customary commission on the real estate sale, the answer is “YES” if the real estate broker or salesperson is licensed as a mortgage loan originator under the MLOLA and is also licensed as a mortgage broker under the MBLSLA.
The answer is “NO” if the real estate broker or salesperson is not licensed as both a mortgage loan originator under the MLOLA and a mortgage broker under the MBLSLA. HUD’s response to public comments on the SAFE Act Final Rule states that a seller who finances the sale of his or her own property avoids the issue of licensing by retaining the services of a licensed loan originator and having that individual carry out the functions that constitute engaging in the business of a loan originator. However, statutory language in the MBLSLA prohibits this activity unless the real estate broker or sales person is not only licensed as a mortgage loan originator, but is also licensed as a mortgage broker under the MBLSLA.
The seller providing the seller financing is a “mortgage lender” as defined under Section 1a(q) of the MBLSLA. The seller must be licensed as a lender unless a licensing exemption in Section 25 of the MBLSLA applies.
An exemption for lenders with limited activity is provided in Section 25(g), which states:
“This act does not apply to the following:
(g) A mortgage lender that in the aggregate with any affiliates makes 10 or fewer mortgage loans in a 12-month period from January 1 to December 31.”
Seller Financing Examples
Note: All examples below involve residential mortgage loans and meet the MLOLA definition of “originate.”
Section 41 of the Mortgage Loan Originator Licensing Act (MLOLA) requires “[t]he unique identifier [NMLSR ID] of any person originating a residential mortgage loan in this state to be clearly shown on all residential mortgage loan application forms, solicitations, or advertisements, including business cards or websites, and any other documents, as established by rule or order of the commissioner.” Advertisements include social media statements or posts. DIFS recommends that the NMLSR ID for the sponsoring mortgage company be listed on all marketing and advertising materials. The MLOLA also explicitly prohibits false, misleading, or deceptive advertising of any kind regarding mortgage loans or the availability of mortgage loans.
Section 2(3)and (4) of the Mortgage Brokers, Lenders, and Servicers Licensing Act (MBLSLA), MCL 445.1652(3)and (4), regulates loan officer compensation. These provisions prohibit a loan officer from directly or indirectly receiving any compensation, commission, fee, points, or other remuneration or benefit unless the loan officer is licensed under the Mortgage Loan Originator Licensing Act (MLOLA) and the benefits are paid by the licensee or registrant for which the loan officer originated that mortgage loan. Further, mortgage brokers, lenders, and servicers are prohibited from directly or indirectly paying any loan officer any of the benefits mentioned above if the loan officer is not licensed under MLOLA or is not an employee or agent of the licensee or registrant paying compensation or other benefit.
In addition, loan originator compensation agreements are governed by Section 1026.25(c)(2) of Regulation Z (12 CFR 1026.25), while payments to loan originators are subject to Section 1026.36 of Regulation Z (12 CFR 1026.36).
