Nov 14

Adam Witmer

Regulation Z, SAFE Act, TRID

In this Compliance Clip (video), Adam explains what NMLS should go on the Closing Disclosure when one lender issued the Loan Estimate, but a different loan officer is now assigned to the loan. This situation can be tricky for financial institutions that don’t have much turnover with their lending staff. Fortunately, Adam busts out some commentary to guide the way on how to comply.

Video Transcript

The following is a transcript of this video.

This Compliance Clip is going to focus on the closing disclosure NMLS number for a different MLO number than what was on the original loan estimate. Our question is this: we had a lender issue, a Loan Estimate with their MLO number, but that lender left our bank and another MLO, who never met the borrower and did not do the underwriting, has been assigned to this loan. Whose NMLS number should go on the closing disclosure? So that's the question we have. 

Our answer, of course, is going to come from 1026.36(g)(1)(ii) of Regulation Z, and specifically the commentary. Let's take a look at the commentary. Here's what the commentary says to this question where we had one mortgage loan officer on the loan estimate because that's the person who gave the loan estimate to the customer, and now that person is gone or been reassigned and we have a new mortgage loan officer who really does not have a relationship with the borrower, but it's just been assigned this file. What do we do on the closing disclosure? 

The commentary says this, “If more than one individual meets the definition of a loan originator for a transaction, the name and NMLSR ID of the individual loan originator with primary responsibility for the transaction at the time the loan document is issued must be included.” So what this means is it doesn't matter who was the MLO, the mortgage loan originator, early on in the loan. When that document is going out and being created, whoever is assigned that loan file is whose NMLS number goes on that closing disclosure. So it could be different than what was on the loan original load estimate. 

Now that begs another question. And the question is, does that original loan estimate need to be reissued, because now we have a discrepancy between the loan estimate and the closing disclosure when we're looking at our NMLS number? The answer is also in the commentary in the same spot as it continues on. It says, “If the individual loan originator with primary responsibility for a transaction at the time a document is issued is not the same individual loan originator who had primary responsibility for the transaction at the time that a previously issued document was issued, the previously issued document is not required to be reissued merely to change a loan originator name, an NMLSR ID number on that prior document being, of course, the loan estimate.” What this is saying is it's okay to have a discrepancy between your NMLS number on the loan estimate and the closing disclosure as long as the mortgage loan originator who was assigned that loan at the time those disclosures went out, their NMLS number was on those specific disclosures.

That's all I have for you today in this Compliance Clip.

Adam Witmer

Regulation Z, SAFE Act, TRID

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Adam Witmer

Adam Witmer is a speaker, author, and founder of the Compliance Cohort. Adam has taught hundreds of seminars and training sessions to thousands of bankers throughout the United States and teaches on all areas of regulatory compliance. Adam has written five e-books that he never published, hit a grizzly bear while driving in a National Park, and is an award winning photographer and musician (though he no longer takes photos nor plays any instruments). In his spare time, Adam can be found kayaking on the lake, doing taekwondo with his kids, working on his (project) house, or spending time with his family.

Adam Witmer

Adam Witmer is a speaker, author, and founder of the Compliance Cohort. Adam has taught hundreds of seminars and training sessions to thousands of bankers throughout the United States and teaches on all areas of regulatory compliance. Adam has written five e-books that he never published, hit a grizzly bear while driving in a National Park, and is an award winning photographer and musician (though he no longer takes photos nor plays any instruments). In his spare time, Adam can be found kayaking on the lake, doing taekwondo with his kids, working on his (project) house, or spending time with his family.

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