Texas RMLO (Residential Mortgage Loan Originator) Licenses - Which Agency, OCC or SML?

There are two Texas regulatory agencies that license Residential Mortgage Loan Originators (RMLOs, also known as MLOs, Mortgage Loan Originators), the OCC and the SML. SML, the Texas Department of Savings and Mortgage, licenses businesses and individuals originating primary home mortgages for consumers to use to purchase a home. OCC, the Office of Consumer Credit, licenses individuals and businesses that issue real-estate related consumer loans, such as residential property tax loans and manufactured housing loans.

If you have any license from SML and intend to originate secondary mortgages or home equity loans, you must apply through SML for an RMLO to originate secondary loans and/or home equity loans. For those who originate secondary mortgages, home equity loans, residential property tax loans or manufactured housing loans, the Office of Consumer Credit, or OCC, requires that you obtain an RMLO through OCC. Since most loan originators handle primary and secondary mortgage products, most mortgage loan originators are licensed by the Texas Department of Savings and Mortgage.

There can be further confusion about the correct licensing agency because in the mortgage industry individuals sometimes say that they have an "NMLS license". NMLS, or the Nationwide Multistate Licensing System, is a quasi-governmental registration, license processing and information-sharing system that handles mortgage loan origination licenses for all U.S. states and territories. Importantly, the state governmental agencies themselves, such as Texas SML and Texas OCC, issue mortgage origination licenses to businesses and individuals. The NMLS system conforms the requested license application information to the requirements of the federal S.A.F.E. Mortgage Licensing Act , or Secure and Fair Enforcement for Mortgage Licensing Act. The S.A.F.E. Act has certain background requirements that apply to all states under federal law. NMLS forms, such as the MU-4 for mortgage loan originators or MU-2 for residential mortgage company control persons, contain background questions about topics such as criminal convictions, pending criminal matters, other license discipline and civil lawsuits. Texas has adopted the provisions of the federal S.A.F.E. Act in the Financial Code, Section180.001 et seq., known as the Texas Secure and Fair Enforcement for Mortgage Licensing Act of 2009.

Ray & Weinstein can assist with adverse event disclosures in the form MU-2 or MU-4, as well as investigations and license discipline for alleged misconduct by RMLO license holders licensed by Texas SML or Texas OCC.