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Getting a mortgage can feel overwhelming, and most borrowers are happy to receive any advice or guidance from their mortgage company. But how can you be sure that your loan officer has the appropriate training and licensure to help you?
That’s why the NMLS was created — to help borrowers ensure that they are working with fully licensed and trained mortgage professionals.
Learn more: How to get a mortgage, step by step
In this article:
What is NMLS?
The Nationwide Multistate Licensing System (NMLS) is a centralized database of mortgage loan originators (MLOs), mortgage lending companies, and other lending professionals. Per federal regulations, these parties must obtain and keep at least one state license, and states are required to share licensing information through NMLS.
Each individual, company, and branch location is assigned a unique NMLS ID number that consumers can use to look up their mortgage lender or loan officer in the NMLS database. In addition to the MLO, the NMLS also catalogs the following information in the database:
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Name (including other names they have used for business purposes)
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Contact information
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License information
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Current and past employment in the mortgage industry
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Any history of civil or criminal actions taken against the MLO
Dig deeper: The best mortgage lenders right now
Why was NMLS created?
NMLS was launched in 2008 as part of the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) in an effort to protect consumers from predatory lending. It was originally called the Nationwide Mortgage Licensing System but eventually changed to the Nationwide Multistate Licensing System. You may hear people use these terms interchangeably.
Before the 2008 SAFE Act, there was no nationwide oversight of mortgage professionals. Each state has its own financial service regulators, but before the NMLS, there was no way of checking that a newly licensed mortgage professional did not have a record of shady lending practices in other states.
In addition to establishing the NMLS database, the 2008 SAFE Act instituted federal requirements for MLOs to attain and keep at least one state license and for states to share licensing information through the NMLS.
Read more: Mortgage brokers — what they do and how much they cost
What are the NMLS requirements for professionals?
To become part of the NMLS database — which also means someone has an NMLS license — a mortgage professional must meet several state and federal requirements. These include:
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Complete at least 20 hours of pre-licensing training
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Pass a national mortgage test
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Undergo a credit report review
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Pass an FBI background check
Mortgage professionals and MLOs also have to complete eight hours of continuing education each year to maintain their NMLS licenses.
Licensing is administered by the state, which means the specific requirements may vary from one state to another.
Keep reading: The best online mortgage lenders
How NMLS can help borrowers
If you want to either buy a house or refinance your mortgage, you can use the NMLS Consumer Access website to vet any mortgage lenders or loan officers you’re considering working with.
The NMLS Consumer Access site is easily searchable, even if you do not have the MLO’s NMLS number. You can search by the NMLS ID number or type in the individual or company name, city, state, and ZIP code.
Searching this consumer site can help you make an informed decision about who to work with for your mortgage lending needs. You will have a complete understanding of the MLO’s licensing, background, and work history.
Dig deeper: Everything to know about how to buy a house
NMLS FAQs
What is the difference between NMLS and MLO?
NMLS stands for the Nationwide Multistate Licensing System, a national database of mortgage and lending companies and professionals. It provides consumers with a method of checking their background and licensing information. MLO is short for mortgage loan originator, and it describes an individual or company that is paid to arrange, obtain, or negotiate a mortgage loan for consumers. An MLO could be a mortgage lending company, an individual mortgage broker, or a loan officer working for a lender.
When was NMLS created?
The 2008 Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) established the NMLS in response to the predatory lending practices of the early 2000s that contributed to the 2008 mortgage crisis. The NMLS allows borrowers to research mortgage professionals to make more informed decisions about which companies to use when buying a home or refinancing a mortgage.
What information do you need to look up a mortgage professional on NMLS?
Every mortgage professional has a unique NMLS ID number that consumers can use to look them up on the NMLS Consumer Access website. However, even if you do not have the NMLS number of a mortgage professional or company, you can still search for them using their name or DBA (doing business as) name along with their city, state, and ZIP code — although the geographical information is not always necessary.
This article was edited by Laura Grace Tarpley.
