NMLS cheat sheet

RESPA Section 8 prohibits fees for referrals of settlement service business; a fee must be for goods or services actually performed, and charges must be reasonably related to their value.

TILA disclosure timing: the Loan Estimate must be delivered or placed in the mail no later than 3 business days after the creditor receives the application; the Closing Disclosure at least 3 business days before consummation.

A valid changed circumstance permits a revised Loan Estimate; the revised estimate must be delivered or mailed within 3 business days of receiving information sufficient to establish the change.

ECOA/Regulation B prohibits discrimination based on race, color, religion, national origin, sex, marital status, age, receipt of public assistance income, or good-faith exercise of rights under the Consumer Credit Protection Act.

HMDA reporting thresholds and data fields are set by Regulation C; covered institutions report application, origination, and purchase data by census tract for public disclosure.

Flood Disaster Protection Act: mandatory flood insurance is required for improved structures in Special Flood Hazard Areas securing a federally related loan, and the borrower must receive notice before closing.

SAFE Act requires mortgage loan originators to be registered or licensed through NMLS, pass a qualifying test, complete pre-licensure education, and submit to criminal background and credit checks.

HOEPA high-cost mortgage triggers include points and fees exceeding a percentage of the loan amount, a prepayment penalty beyond specified limits, or an APR above the average prime offer rate by a set margin.

Fair lending enforcement split: ECOA/Regulation B compliance is examined by the CFPB and prudential regulators, while disparate treatment claims may also proceed under the Fair Housing Act.

Conventional loans are not government-insured; conforming conventional loans meet Fannie Mae/Freddie Mac loan limits, while non-conforming jumbo loans exceed them.

FHA loans are insured by HUD/FHA, allow lower credit scores and down payments, and require mortgage insurance premium payments; upfront MIP is typically financed into the loan.

VA loans are guaranteed by the Department of Veterans Affairs, generally require no down payment for eligible veterans with entitlement, and carry a funding fee unless exempt.

USDA Rural Development loans are for eligible rural properties and income-limited borrowers and may require an upfront guarantee fee and annual fee.

Amortization: monthly principal-and-interest payment on a fixed-rate loan = P × [r(1+r)^n] / [(1+r)^n − 1], where P is principal, r is monthly rate, and n is number of payments.

APR reflects the cost of credit as a yearly rate including certain finance charges, so it generally exceeds the note rate when fees are financed or paid by the borrower.

Loan-to-value (LTV) = loan amount ÷ property value; combined LTV (CLTV) adds subordinate lien balances to the first lien.

Escrow/impound accounts collect property taxes and hazard insurance in monthly installments; RESPA limits the cushion to no more than one-sixth of the total annual escrow payments.

Prepayment penalties, balloon features, and interest-only structures are risk features that can push a loan into higher-cost or non-qualified mortgage treatment.

Pre-qualification is an informal estimate of borrowing capacity based on stated information; pre-approval involves verified documentation and is more reliable for buyers.

The loan application date triggers disclosure timing; the creditor must issue the Loan Estimate within 3 business days of receiving the application.

Income verification compares documented income to the income relied on for repayment; self-employed borrowers typically require tax returns and business documentation.

Debt-to-income ratio = total monthly obligations ÷ gross monthly income; the ability-to-repay/qualified mortgage rules impose DTI and points-and-fees limits.

Appraisal requirements: a copy of the appraisal must be provided to the borrower promptly and no later than 3 business days before closing, with a right to waive the timing.

Adverse action notices must be delivered within 30 days of a completed application decision; the notice states reasons for denial or the right to request them.

Rate lock agreements state the locked rate, lock period, and any fees; a lock extension may create a new cost that must be disclosed.

Closing disclosure reconciliation: tolerances apply to certain fees, and refunds are required when disclosed costs exceed permitted tolerance limits.

Fiduciary-style duties in origination include honesty, good faith, fair dealing, and disclosure of material facts about loan terms and costs.

Steering a borrower to a higher-cost loan to increase compensation is a prohibited practice under TILA loan originator compensation rules and ethics standards.

Dual compensation is restricted: a loan originator generally cannot receive compensation from both the borrower and a third party on the same transaction.

Confidentiality: nonpublic personal information must be safeguarded under the Gramm-Leach-Bliley Act privacy and safeguards rules; sharing requires notice and opt-out where applicable.

Fair lending ethics extend beyond ECOA to prohibit discouraging applicants, redlining, and disparate treatment in marketing or underwriting.

Conflicts of interest must be disclosed; originators should not accept undisclosed gifts or referral fees that could influence loan placement.

Accurate records and signatures are required; falsifying income, assets, or occupancy status constitutes mortgage fraud and may trigger repurchase or criminal liability.

NMLS licensing is coordinated through the Nationwide Multistate Licensing System, but each state retains its own licensing act, rules, and examination authority.

State SAFE Act implementation requires licensees to meet state-specific pre-licensure education hours, testing, and continuing education requirements in addition to federal minimums.

License maintenance includes annual renewal, surety bond requirements, and reporting of changes to control, address, or legal name within state-specified timeframes.

State regulators may examine licensees and enforce violations of state mortgage laws; penalties can include fines, license suspension, or revocation.

Unique identifiers must be used on loan documents and advertising where state law requires disclosure of the NMLS ID.

State advertising rules may require disclosure of the licensee's name and license number and prohibit misleading or unsubstantiated claims.

Record retention periods and permissible fees vary by state; licensees must follow the stricter of state or federal requirements when both apply.

RESPA Section 8 prohibits fees for referrals of settlement service business; a fee must be for goods or services actually performed and reasonably related to their value.

TILA/Regulation Z timing: Loan Estimate within 3 business days of application; Closing Disclosure at least 3 business days before consummation.

A valid changed circumstance allows a revised Loan Estimate, delivered or mailed within 3 business days of receiving information sufficient to establish the change.

ECOA/Regulation B prohibits discrimination based on race, color, religion, national origin, sex, marital status, age, public assistance income, or good-faith exercise of consumer credit rights.

HMDA/Regulation C requires covered institutions to collect and report application, origination, and purchase data by census tract for public disclosure.

Flood Disaster Protection Act: mandatory flood insurance is required for improved structures in Special Flood Hazard Areas securing a federally related loan, with notice before closing.

SAFE Act requires MLOs to be registered or licensed through NMLS, pass a qualifying test, complete pre-licensure education, and submit to background and credit checks.

HOEPA high-cost triggers include points and fees exceeding a percentage of the loan amount, prepayment penalties beyond specified limits, or an APR above the average prime offer rate by a set margin.

Conventional loans are not government-insured; conforming loans meet Fannie Mae/Freddie Mac loan limits, while jumbo loans exceed them.

FHA loans are insured by HUD/FHA, allow lower credit scores and down payments, and require mortgage insurance premiums, with upfront MIP often financed.

VA loans are guaranteed by the Department of Veterans Affairs and generally require no down payment for eligible veterans with entitlement; a funding fee may apply unless exempt.

USDA Rural Development loans target eligible rural properties and income-limited borrowers and may require upfront guarantee and annual fees.

Fixed-rate amortization payment = P × [r(1+r)^n] / [(1+r)^n − 1], where P is principal, r is the monthly rate, and n is the number of payments.

APR reflects the yearly cost of credit including certain finance charges, so it generally exceeds the note rate when fees are financed or paid by the borrower.

LTV = loan amount ÷ property value; CLTV adds subordinate lien balances to the first lien.

Escrow accounts collect taxes and hazard insurance monthly; RESPA limits the cushion to no more than one-sixth of total annual escrow payments.

Prepayment penalties, balloon features, and interest-only structures are risk features that can push a loan into higher-cost or non-qualified mortgage treatment.

Pre-qualification is an informal estimate based on stated information; pre-approval involves verified documentation and is more reliable for buyers.

The application date triggers disclosure timing; the creditor must issue the Loan Estimate within 3 business days of receiving the application.

Income verification compares documented income to the income relied on for repayment; self-employed borrowers typically require tax returns and business documentation.

Debt-to-income ratio = total monthly obligations ÷ gross monthly income; ability-to-repay and qualified mortgage rules impose DTI and points-and-fees limits.

A copy of the appraisal must be provided to the borrower promptly and no later than 3 business days before closing, with a right to waive the timing.

Adverse action notices must be delivered within 30 days of a completed application decision and state reasons for denial or the right to request them.

Rate lock agreements state the locked rate, lock period, and any fees; a lock extension may create a new cost that must be disclosed.

Closing Disclosure reconciliation applies tolerance limits to certain fees, and refunds are required when disclosed costs exceed permitted tolerances.

Origination duties include honesty, good faith, fair dealing, and disclosure of material facts about loan terms and costs.

Steering a borrower to a higher-cost loan to increase compensation is prohibited under TILA loan originator compensation rules and ethics standards.

Dual compensation is restricted: a loan originator generally cannot receive compensation from both the borrower and a third party on the same transaction.

Confidentiality: nonpublic personal information must be safeguarded under Gramm-Leach-Bliley privacy and safeguards rules; sharing requires notice and opt-out where applicable.

Fair lending ethics extend beyond ECOA to prohibit discouraging applicants, redlining, and disparate treatment in marketing or underwriting.

Conflicts of interest must be disclosed; originators should not accept undisclosed gifts or referral fees that could influence loan placement.

Accurate records and signatures are required; falsifying income, assets, or occupancy status constitutes mortgage fraud and may trigger repurchase or criminal liability.

NMLS licensing is coordinated through the Nationwide Multistate Licensing System, but each state retains its own licensing act, rules, and examination authority.

State SAFE Act implementation requires licensees to meet state-specific pre-licensure education hours, testing, and continuing education requirements in addition to federal minimums.

License maintenance includes annual renewal, surety bond requirements, and reporting changes to control, address, or legal name within state-specified timeframes.

State regulators may examine licensees and enforce state mortgage laws; penalties can include fines, license suspension, or revocation.

Unique identifiers must be used on loan documents and advertising where state law requires disclosure of the NMLS ID.

State advertising rules may require disclosure of the licensee's name and license number and prohibit misleading or unsubstantiated claims.

Record retention periods and permissible fees vary by state; licensees must follow the stricter of state or federal requirements when both apply.