National online database will benefit the public, the industry and regulators
The Kentucky Office of Financial Institutions (OFI) joined six other state agencies in participating in the Nationwide Mortgage Licensing System (NMLS) on Jan. 3, 2008, its first day of service.
Four people have already completed the full Kentucky mortgage license or registration process online, and many more began the process on the first day of operation for the new online system.
“I am proud that Kentucky is taking a leadership role in this initiative,” said OFI Executive Director Cordell Lawrence. “NMLS represents a new era in supervision of the mortgage industry that will promote more stable markets and protect consumers.”
The launch of NMLS is just one part of a multi-faceted plan to improve regulation and bring about greater uniformity across state lines in mortgage supervision. These efforts include coordinated supervision, improved regulatory practices and consistent standards for testing and training of mortgage originators.
Through NMLS, mortgage companies and professionals will maintain a single record, electronically stored in a secure database accessible by licensees over the Internet. This will provide consistent and comprehensive information to state regulators such as OFI, so the industry may be better supervised.
Mortgage lenders, mortgage brokers and loan officers will have the convenience of maintaining a single record with which they can apply for, amend, update, renew or surrender licenses online in one or more states.
Seven states participated in the launch: Idaho, Iowa, Kentucky, Massachusetts, Nebraska, New York and Rhode Island. In addition, 42 state agencies that regulate the mortgage industry in 40 states so far have indicated their intent to transition onto the system.
The NMLS is part of a new regulatory framework that seeks to:
- Enhance consumer protection;
- Improve the efficiency and effectiveness of state supervision of the U.S. mortgage market;
- Fight mortgage fraud and predatory lending that costs consumers and the mortgage industry hundreds of millions of dollars in losses each year;
- Increase accountability among mortgage industry professionals; and
- Unify and streamline state license processes for mortgage lenders and mortgage brokers.
The NMLS was spearheaded by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators with input from Kentucky and other states.
“Kentucky’s participation in this multi-state effort is a testament to our commitment to improved supervision of the mortgage lending industry,” Lawrence said. “Kentucky OFI oversees 732 mortgage entities and 4,293 individuals who originate mortgage loans. OFI fulfills its charge to license, examine and, when necessary, investigate each of these.”
Information about gaining access to and setting up a record in the system may be found on OFI’s Web site at www.kfi.ky.gov/industryinformation/nmls.htm. The NMLS may be found on the Web at www.stateregulatoryregistry.org/NMLS.
OFI is an agency of the Department of Public Protection in the Environmental and Public Protection Cabinet. It supervises the financial services industry by examining, chartering, licensing and registering various financial institutions, securities firms and professionals operating in Kentucky. OFI’s mission is to serve the public through effective and efficient regulation that promotes consumer confidence and economic growth.