Louisiana MLO cheat sheet

The Louisiana Residential Mortgage Lending Act (La. R.S. 6:1081 et seq.) is administered by the Office of Financial Institutions (OFI) within the Louisiana Department of Insurance and Financial Institutions; OFI licenses mortgage brokers, mortgage lenders, and mortgage originators.

Every Louisiana-licensed mortgage loan originator must hold a valid unique identifier issued through NMLS and must be sponsored by a licensed Louisiana mortgage broker or lender; sponsorship is registered in NMLS and a licensee may not originate without an active sponsoring entity.

Louisiana licensees must complete at least 8 hours of NMLS-approved continuing education each year, which must include 3 hours of federal law and regulations, 2 hours of ethics (fraud, consumer protection, fair lending), 2 hours of nontraditional mortgage lending, and 1 hour of Louisiana-specific law and regulation.

Pre-licensing for a Louisiana MLO is 20 hours of NMLS-approved coursework: 3 hours federal law, 3 hours ethics, 2 hours nontraditional mortgage lending, and 12 hours of Louisiana-specific content covering state law, OFI rules, and Louisiana practice.

Licenses renew annually and expire December 31; renewal requires the CE hours be completed and reported, NMLS MU4 filing, and payment of OFI fees before the deadline, and late CE after December 31 can result in license expiration and a new application.

Louisiana requires a surety bond for licensed mortgage brokers and lenders set by OFI based on loan volume, and the bond must remain in force for the license to stay active; originators are covered under the sponsoring entity's bond rather than posting their own.

Financial responsibility and background standards apply: applicants submit fingerprints for FBI criminal history checks, authorize a credit report, and disclose felony convictions; OFI may deny or discipline a license for dishonest dealing, fraud, or unlicensed activity under La. R.S. 6:1092.

Louisiana-specific conduct rules include restrictions on charging advance or upfront fees before services are performed, requirements for written broker agreements and good-faith estimates of fees, and OFI authority to examine books and records and investigate consumer complaints.

Advertising and records: Louisiana licensees must retain mortgage loan transaction records for at least 3 years after the loan is funded or the application is withdrawn, keep records available for OFI examination, and include the NMLS unique identifier on advertising as required by federal rules.

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act, Title V of HERA) requires MLOs to be licensed and registered in the NMLS, with states setting standards through the CSBS/AARMR model and the CFPB issuing federal registration rules for bank employees under Regulation G.

SAFE Act minimum licensing standards: 20 hours pre-licensure education (3 hours federal law, 3 hours ethics, 2 hours nontraditional mortgage products, 12 hours general mortgage knowledge), a passing score on the NMLS national test with uniform state content, and a 20-hour national CE requirement with the same subject breakdown annually.

The NMLS national test with uniform state content is a 125-question, 190-minute exam; a scaled score of 75 is passing, and candidates who fail must wait 30 days before retaking and 180 days after a third consecutive failure.

An MLO license application requires submission of the MU4 form, fingerprints for FBI and state criminal background checks, authorization for an independent credit report, and a check of the Nationwide Multistate Licensing System consumer complaint database.

The SAFE Act defines an MLO as an individual who takes a residential mortgage loan application and offers or negotiates terms of a residential mortgage loan for compensation or gain; administrative and clerical staff who do not take applications or negotiate terms are excluded.

Federal law requires the NMLS unique identifier to appear on all mortgage loan documents and advertising, and the identifier must be provided to consumers clearly and conspicuously; under Regulation Z, loan originator identifiers appear on the note and related disclosures.

Regulation Z/TRID timing rules: the Loan Estimate must be delivered or placed in the mail within 3 business days of application, and the Closing Disclosure must be received by the consumer at least 3 business days before consummation; a revised CD restarts the 3-day review period.

Ability-to-repay and qualified mortgage standards under Regulation Z (12 CFR 1026.43) require verification of income, assets, debts, and employment; the general QM uses a price-based threshold and the rebuttable presumption or safe harbor depends on loan pricing relative to the APOR.

Prohibited practices and anti-steering: Regulation Z prohibits steering consumers to loans that are not in their interest, restricts compensation based on loan terms, and bars dual compensation to a broker and lender for the same transaction; RESPA Section 8 prohibits kickbacks and unearned fee splits.