Department of Financial Institutions
Greg Gonzales, Commissioner

The Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E.) is a federal act signed into law on July 30, 2008 and must be complied with by all states, effective July 31, 2009. S.A.F.E. requires the states to adopt the following measures:

• Provide for the uniform licensing of mortgage loan originators through a nationwide internet based system termed the Nationwide Mortgage Licensing System (NMLS)
• Provide for minimum standards for licensing of mortgage loan originators including:
  1. No mortgage license revocation
  2. No felony conviction in the last seven (7) years preceding application date or EVER involving financial fraud
  3. Demonstrating financial responsibility, character, and fitness to warrant operating honestly, fairly, and efficiently
  4. Passing a written pre-licensing test
  5. Completed twenty (20) hours of pre-licensing education
  6. Upon annual renewal, must continue to meet first three (3) standards, and complete eight (8) hours of continuing education
  7. Require a surety bond, scaled upon the dollar amount of loans originated

The NMLS (Nationwide Mortgage Licensing System) is an internet based licensing system developed for the mortgage industry and created by the state and federal mortgage regulatory organizations, CSBS (Conference of State Bank Supervisors) and AARMR (American Association of Residential Mortgage Regulators). It was developed to regulate and improve supervision of the mortgage industry by streamlining the license application and renewal process. Mortgage companies and loan originators must create an electronic record and be licensed through the system.

Each state will retain its regulatory authority to approve, deny, suspend, or revoke licenses. NMLS is designed to satisfy requirements of all states. It is important that all applicants, companies and individuals, refer to jurisdiction-specific requirements in each state, in which they are applying, in order to be sure they meet the necessary qualifications.

For more details on NMLS.

Applications submitted online through the NMLS will be processed in order of submission, when complete. This includes all Tennessee-specific requirements that must be met. Tennessee's Statute allows the Mortgage licensing division 90 ninety) days to act upon a completed NEW company application. (Companies requesting transition will be processed faster.) Average processing time may be different, but calling the department about pending status only delays this process. Your license status, and any additional information the department may need from you, will be communicated through the NMLS.

As a mortgage loan originator, your request for a new registration or transition must be accompanied by a Company Sponsorship initiated by your company. After Sponsorship is received, your application or transition will be processed in the order it was received once all Tennessee-specific requirements are also met, including fingerprinting/background checks.

We appreciate your understanding and cooperation in the application process.

Tennessee will begin using the NMLS for all NEW applications February 1, 2009.

All current licensees, registrants, and loan originators in Tennessee must transition their license or registration information to NMLS, February 1 through July 31, 2009, to renew their licenses for 2010.

Pre-licensure education requirements: Twenty (20) hours of NMLS approved education including

1. Three (3) hours of Federal law and regulations
2. Three (3) hours of Ethics
3. Two (2) hours training related to nontraditional mortgage lending

This applies to ALL mortgage loan originators, new applicants as well as current originators. This must be accomplished in 2009, the specific requirements being worked out by NMLS and CSBS, and are yet to be determined.

NMLS is developing this and it will be administered by an approved test provider. The test will cover an originator's knowledge in the subject areas of:

1. Ethics
2. Federal and state laws and regulations pertaining to mortgage origination, fraud, consumer protection, nontraditional mortgage marketplace, and fair lending issues.

A passing score of seventy-five (75) must be attained.

An individual can retake a test three (3) consecutive times with a thirty (30) day interval between tests. After three (3) failed attempts, the individual must wait at least six (6) months before taking the test again.

An originator that fails to maintain a valid license for five (5) years or longer must retake the test.

Eight (8) hours with at least:

1. Three (3) hours of Federal law and regulations
2. Three (3) hours of Ethics
3. Two (2) hours training related to nontraditional mortgage lending

These courses must be approved by NMLS and are yet to be determined

In Tennessee, under Public Chapter No. 821, beginning 1/01/09, all NEW applicants for a mortgage loan originator registration, including those changing companies, and all control people in a mortgage company, broker, lender, or servicer, applying for a new license must submit to a criminal background/fingerprint check. This also applies to any company that does not timely transition to the NMLS and must file a new application for 2010.

The Department will require these control people to submit to the fingerprint check: Managing Principal, Managing Members of an LLC, Branch Manager, Executive Officers, General Partner, Equitable 25% Owner, and any other individual who directs the affairs of the company or establishes policy.

Beginning on January 1, 2009, all mortgage loan originators applying for a NEW registration must submit to a criminal background/fingerprint check. In addition, all existing mortgage loan originators will have to submit to criminal background/fingerprint checks in association with their applications for continued registration into 2010. This requirement is part of the requirements of the S.A.F.E. Act, and the NMLS renewal process beginning in August, 2009. However, the Commissioner shall have the authority to require a criminal history/background/fingerprint check at any time as a condition of continued registration of a mortgage loan originator.

Detailed fingerprinting instructions are available on our website www.tn.gov/tdfi under the appropriate license application and will be available under the Tennessee-specific instructions on NMLS.

You can email the department at askmortgage.licensing@tn.gov with your company's Name, Address, and how many fingerprint cards you will need.

All Branch locations physically located in Tennessee AND those out-of-state branches that originate loans, secured by real property in Tennessee, must license their location. (All mortgage loan originators that are originating these loans MUST also be registered in Tennessee.)

NMLS Call Center 240-386-4444

Tennessee Department of Financial Institutions:
Email questions to askmortgage.licensing@tn.gov or call 615-253-6714 and leave a message.