The Mortgage Industry FAQs page is designed to assist potential and existing mortgage licensees/registrants with common questions about the various Georgia laws and Department regulations and policies applicable to the residential mortgage industry.
To ensure that the citizens of Georgia have access to well-managed and properly operated mortgage service providers, the Mortgage Division of the Georgia Department of Banking and Finance is responsible for supervising those who are licensed (or who should be licensed) to do business in the residential mortgage industry. Residential Mortgage Lenders and Brokers must apply to the Department and meet certain licensing standards before they may legally offer their services to the public. Monetary fines and civil sanctions can be levied if a person or company is discovered to be operating in Georgia without being properly licensed. After obtaining a license, periodic examinations of the licensee's operations are performed to monitor operating standards to assure compliance with the provisions of the Georgia Residential Mortgage Act (GRMA).
The Department participates in the Nationwide Mortgage Licensing System (NMLS), as contemplated by the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE”) (H.R. 3221). Title V requires that each state enact minimum standards regarding the supervision of mortgage entities.
The NMLS is a multi-state licensing system that allows companies and individuals to apply for and manage their licenses with the Department and other participating states through a secure website. The NMLS was developed by and for state regulators to streamline the licensing process for regulators and the industry allowing all mortgage businesses to be licensed in Georgia and other participating states with a minimum amount of paperwork.
Legislation requiring the licensing of Mortgage Loan Originators ("MLOs") as required by SAFE was passed by the Georgia Legislature in 2009. The legislation was signed by the Governor and became effective July 1, 2009.
Please note that the NMLSR federal registration process must be utilized if you are an employee of a bank, bank subsidiary or a credit union. As required under federal law, residential mortgage loan originators employed by banks, savings associations, credit unions, or Farm Credit System institutions must register with the registry, obtain a unique identifier from the registry, and maintain their registrations. Further information regarding the registry and the registration process is available at the registry's website: http://fedregistry.nationwidelicensingsystem.org/Pages/default.aspx.
The following sections of the Official Code of Georgia Annotated (O.C.G.A.) and the Regulations of Department of Banking and Finance are used in the operation and regulation of residential mortgage businesses in Georgia. You should be familiar with these in the operation of your mortgage business. Please note that the Georgia Residential Mortgage Act (GRMA) is often referred to in licensing applications and other information asARTICLE 13.
Georgia Residential Mortgage Fraud Act - OCGA,Title 16-Crimes and Offenses, Chapter 8-Offenses Involving Theft, Article 5-Residential Mortgage Fraud. District attorneys and the Attorney General have the authority to conduct the criminal investigation and prosecution of all cases of residential mortgage fraud under this article or under any other provision of this title.
Applications for a new mortgage broker/processor or lender license or registration must be made through the Nationwide Mortgage Licensing System (NMLS). The Department will review and approve or deny your Georgia application through the NMLS.
Processing of background checks and fingerprint cards for brokers, lenders and processors must still be submitted through the Department. Instructions and checklists are available through the NMLS website. Review of law enforcement agency information may extend processing time up to 10 weeks.
Depending on application volume and the time of year the application is received, most applications for a mortgage license are given an initial review within 15 days of receipt of the COMPLETE application. After performing an initial review and initiating the criminal background check, we will notify the applicant in writing of any additional information which may be needed. This document is titled "Schedule A". Note that two sets of original fingerprint cards must be submitted on all control individuals required to submit background check authorizations, and the processing of these cards through the state and federal criminal information systems can add time to the application process. Remember that all new license applications are filed through the Nationwide Mortgage Licensing System (NMLS) and any fees collected through them are non-refundable.
Requests for application status updates must be in writing. E-mail your request for application status to: firstname.lastname@example.org
Daily calls to inquire about the status of a particular application only serve to delay the process for all applicants.
Bad credit will make your application very difficult to approve. Applicants should be aware of disqualifying factors concerning creditworthiness. The Department does not qualify financial responsibility on a credit score, but looks at the applicant’s overall credit report. Judgments, defaults on student or government loans, child support in arrears, and other factors could result in the denial of licensure. Tax liens, charge-offs or collection accounts, and foreclosures or short sales with a deficiency will also negatively affect licensing unless a payment plan is in place and at least 3 consecutive payments have been made prior to the application.
Criminal activity increases the difficulty of making a favorable finding on an application. While minor traffic offenses will not affect your chances for a license, convicted felons who have not been PARDONED (not just paroled) or who have not sought and obtained/documented the remedies provided for in O.C.G.A. Section 7-1-1004(h) cannot be licensed. The Department verifies the criminal background of each applicant for a mortgage license. It is very important to provide honest answers in the application. Omissions regarding arrests are deemed to be a serious falsification of the application and can lead to denial regardless of the nature or outcome of the arrest.
A "Registrant" is a company that performs activities covered under the GRMA, but due to its charter and ownership structure, has been specifically exempted from licensing. Certain types of companies are exempt from the licensing provisions of GRMA. These exemptions extend to organizations such as banks and credit unions which are properly chartered by the state or federal government, and to properly licensed finance companies who restrict their lending activities to those covered by the Georgia Industrial Loan Act (GILA). Wholly-owned mortgage subsidiaries of federally insured financial institution holding companies, but not owned directly by the financial institution, qualify for "registrant" status since they are separately chartered companies subject to possible review by the primary regulators of financial institutions themselves in the holding company system. However, such indirect supervision does not qualify the entities for exemption from mortgage licensing. Application for registrant status is similar to the application for a license and must be made through the NMLS. "Registrants" under GRMA should not be confused with a "federal registrant" for the purposes of the Federal SAFE Act.
Submit your branch application through the NMLS. PleaseDO NOT submit a branch application for branches that are not physically located within the State of Georgia into the Nationwide Mortgage Licensing System. Out-of-state branches do not require the Department’s approval.
NO. Unlike some states, Georgia does not issue a separate license for each established branch. Branch offices and those individuals who are proposed to serve as branch managers must be approved, as well as any changes in managers for existing approved branch locations. A listing of approved branch locations is contained on our database for each licensee. Operating an unapproved office can jeopardize a license and subject the licensee to monetary fines.
If the licensee is a lender, they must generally provide funding for the loans generated by that branch. It is not appropriate for a lender's branch to broker loans to other lenders.
If a lender licensee desires to allow its Georgia branches to broker residential mortgage loans on Georgia property to outside lenders, that lender licensee must have in place a comprehensive and ongoing strategic business plan that addresses brokerage activities by its Georgia branches, recognizes and acknowledges the risks involved, and provides for management of those risks and adequate supervision and control of its branches’ brokerage activities. The strategic business plan is subject to review by the Department and failure to develop and maintain the plan or failure to adequately control and supervise its Georgia branches’ residential mortgage brokerage activities can result in the loss of a lender’s license.
In all cases, the lender licensee must have consistent policies and procedures and quality control for loan origination and processing that are enforced at all the branches.
Most examinations conducted by the Department are done so on a "targeted" basis. Targeted examinations result from any number of reasons, but are often scheduled as a result of information provided to the Department from a consumer complaint, a company insider indicating operational or problematic issues, or other industry insiders reporting questionable operations. If any of these reasons exist, you can expect to see us at any time, and as often as every 90 days. We will monitor your operations to ensure that they are conducted in a manner that protects the contractual and property rights of the citizens of Georgia.
A Mortgage Loan Transaction Journal is essentially a list of the mortgage applications that you have had. Rule 80-11-2-.03 establishes what must be on this list, including the names of the borrower and co-borrower, last four digits of their social security number(s), date the borrower applied for the mortgage loan, name of the loan officer and their Nationwide Mortgage Licensing System and Registry (NMLSR) unique identifier, disposition of the mortgage loan application, and date of disposition. The Journal must be updated every seven (7) days.
Yes. Fines are imposed to insure that licensees operate as specified by the GRMA and the rules promulgated by the Department (the Code and Regulations). Fines provide the Department an option other than license REVOCATION OR SUSPENSION in order to insure compliance with GRMA. Those licensees who operate in a professional manner and strictly observe the provisions of the Code will probably never be fined. Those who violate the provisions of the Code or who commit prohibited acts will likely pay thousands in fines.
Renewals are submitted through the Nationwide Mortgage Licensing System (NMLS). Applications must be filed NO LATER than December 1st of each year. There is a substantial fine for late filing of a renewal application, and renewal of a license will not occur until all outstanding fines are paid. Applicants complete the application and pay all outstanding fees and fines, and in order to avoid being fined for late renewal, licensees must complete their application and payment by the December 1st deadline. Licenses expire annually on December 31st.
All other outstanding business or administrative issues with our licensees will be settled at renewal time. No renewal applications will be approved until all outstanding issues have been resolved.
Yes. Brokers and processors must have obtained 8 hours of continuing education within the appropriate 10 month period in order to renew their license. A mortgage broker that is also a mortgage loan originator may apply the 8 hours of annual continuing education required by O.C.G.A. 7-1-1004(g) to the continuing education requirement. Refer to Rule 80-11-4-.01(7) for specifics regarding the regulation.
License Renewal Applications must be filed no later than December 1st each year to avoid a fine/late fee.
Pursuant to Rule 80-5-1-.04, the "GRMA Per Loan Fees Reporting and Payment Process" is due twice each year: one report is due September 1 (covers all mortgage loans from January 1 through June 30 of that year); the second report is due March 1 (covers the period of July 1 through December 31 of the previous year).
Pursuant to O.C.G.A. Section 7-1-1011(b)(2), the $10 fee shall be imposed on the closing of every mortgage loan subject to regulation under this article which, as defined in Code Section 7-1-1000, includes all mortgage loans, whether or not closed by a mortgage broker or mortgage lender licensee or registrant, a fee of $10.00. The fee shall be paid by the borrower to the collecting agent at the time of closing of the mortgage loan transaction. The collecting agent shall remit the fee to the department at the time and in the manner specified by regulation of the department. A change to a security instrument made solely for the purpose of correcting a clerical error will not be subject to a $10.00 fee. Mortgage licensees and registrants that act as thecollecting agent (including brokers who table fund and collect the fee) must submit the fees and file the fee statement before the deadline to avoid fines and possible administrative action.
"Letter Form" reports must be made anytime an employee is suspected of criminal activity.
Amendments to the existing record of the licensee must be posted through the Nationwide Mortgage Licensing System (NMLS). Frequent changes requiring reporting include the following, and additional information and links may be found on the Mortgage Forms & Applications page.
Under the requirements of the Federal SAFE Act, all state mortgage licensees must submit a report of condition as required by NMLS. The NMLS Mortgage Call Report (MCR) was developed by state regulators to meet this requirement.
The MCR is required to be completed by (1) all state licensed companies and (ii) companies employing state licensed mortgage loan originators (MLOs). Companies must submit at least their application and origination activity information on a quarterly basis.
If you held a state license or employed state licensed MLOs during a reporting period, you must complete the NMLS Mortgage Call Report, even if you had no origination activity during the period.
The requirement for a license depends on the information taken, which might be an "application" for state licensing purposes. The following information applies to "telemarketing" - whether the information is obtained via standard phone solicitations, or through internet lead generation.
Telemarketers who accept applications for loans on their own initiative from consumers and without a contract from a licensee for sale of the contact to licensees are required to be licensed under the Act.
Telemarketers who contact Georgia consumers and generate a list of potential residential mortgage contracts under a written contract from a licensee are not required to be licensed, provided:
The telemarketer makes it clear that they are contacting the consumer on behalf of (a) specific licensee(s);
The fee for the service is on a "flat-fee" basis, not a "per-loan" basis or a closed loan fee basis;
The company must be in the telemarketing business and not perform other mortgage related functions for the licensee; and
The company may only gather minimal contact and non-specific property or income information. Information gathered which is sufficient to verify credit, employment, income, date of birth etc. cannot be gathered. This is considered application information and the telemarketer must then have their own license.
A MLO is someone who takes a residential mortgage loan application, offers or negotiates terms of a residential mortgage loan, or assists a consumer in obtaining or applying to obtain a residential mortgage loan. Mortgage loan activity includes, but is not limited to soliciting, negotiating, originating, processing, underwriting, funding, servicing, purchasing and offering loan modification services.
The Georgia Department of Banking and Finance will interpose no objection to originators who have left the employment of a lender or broker being compensated for the work that they performed before changing jobs. Consequently, unless your employment contract contains language to the contrary, it is permitted for an originator to be compensated for these loans. As a practical matter, however, many brokers or lenders will not continue to compensate individuals who have left their employment. You should remember that the loan files remain the property of the employer and taking those files to a new employer may be considered theft. To avoid any misunderstanding on this issue, make sure that you operate with an employment agreement which specifies your rights and responsibilities as an employee. Should your borrowing customer wish to follow you to your new employer, they would have to contact your former employer and request a withdrawal of that application. They would then be free to apply elsewhere.
If you are an exclusive W-2 employee of a licensed broker or lender and you do not assist borrowers in applying for or negotiating the terms of a loan, you do not have to hold a MLO license. However, if you ever venture into the activities described in the definition of a MLO or advertise such services, you must seek and obtain licensure.
Yes. If you fall under the definition of a MLO, you must obtain a MLO license, unless you are specifically exempt from MLO licensing. The most common exemption from licensing is for depository institution loan originators. Applications should be made through the Nationwide Mortgage Licensing System (NMLS). Originating a Georgia residential loan without a MLO license will subject the MLO and his/her employer to administrative action and fines.
If you are a loan originator employed by a bank, a subsidiary of a bank, a credit union or an institution regulated by the Farm Credit Administration, you do not have to obtain a loan originator license from the Department. However, those individuals do have to be registered with the Nationwide Mortgage Licensing System and Registry (NMLSR). Read more about federal registration on the NMLSR website. Processors, underwriters, and real estate agents who do not engage in MLO activity and loan originators who only work on commercial mortgage loans are exempt from MLO licensing.
Georgia Law and Department Rules have not changed regarding this matter. The only way to be paid on a 1099 is for a licensed company to get paid on a 1099 in the company’s name, or an individual licensed as a broker or lender to get paid on a 1099 in the individual’s name. All other work as an “independent contractor” is prohibited from being compensated via 1099.
No. If you do not originate loans or otherwise directly affect the loan process (i.e., you serve only in an administrative / operational capacity), you do not have to obtain a MLO license. However, your loan originators will have to obtain MLO licenses.
Not unless you are also licensed as a mortgage broker or lender. The MLO license is a license that is separate from the broker and lender licenses issued by the Georgia Department of Banking and Finance. A MLO must be a supervised, exclusive, W-2 employee of a licensed mortgage broker or lender, or you must have your own mortgage broker license in addition to your MLO license.
An MLO applicant must be aware of disqualifying factors, including criminal history and creditworthiness. The Department does not qualify financial responsibility on a credit score, but looks at the MLO’s overall credit report. Judgments, defaults on student or government loans, child support in arrears, and other factors could result in the denial of licensure. Tax liens, charge-offs or collection accounts, and foreclosures or short sales with a deficiency will also negatively affect MLO licensing unless a payment plan is in place andat least 3 consecutive payments have been made prior to the application. (Payment plans will be checked at renewal for continuation.)
MLOs will have to obtain 8 hours of Continuing Education through an educational provider approved by the NMLSR. At least 1 hour must be related to GA specific laws and rules. Education must be completed by October 31st of each year.
Licenses expire on December 31st of each year. The renewal period is from November 1st – December 1st of each year, with licenses being renewed for the following calendar year. MLO renewal applications received after December 1st will be subject to a $100 late fee.
Upon signing up with NMLSR, you will be given your own NMLSR Unique Identifier. When you pass the federal requirements for licensing, your Unique Identifier will become effective (Upon meeting state requirements, you will also receive a MLO license number that is specific to individual states in which you get licensed). This unique identifier must appear on individual advertisements, business cards, and on the Mortgage Loan Transaction Journal kept by your employer.
Yes. After you become licensed, your name, NMLSR Unique Identifier, and the name of your sponsoring company will be made public on the NMLS website to identify you to the public as an individual who is licensed to engage in residential mortgage business.
Yes. You are responsible for abiding by the laws and rules just like mortgage companies are. You must abide by the Georgia Residential Mortgage Act and the Mortgage Division Rules. You are responsible for maintaining a current Mortgage Loan Transaction Journal. The amount of time that you are required to keep these records is 5 years.