What is an NMLS Number and Why Does it Matter?

Estimated reading time: 2 minutes

When applying for a mortgage, there’s a chance you’ve noticed a string of numbers next to the initials “NMLS.” While it may be tempting to gloss over what an NMLS number means, these digits represent trustworthiness and accountability.

What is an NMLS Number?

The Nationwide Mortgage Licensing System (NMLS) is a centralized online database used by mortgage and finance regulatory agencies to maintain state licensing. This comprehensive system contains the licensing information for all state-licensed mortgage companies, Mortgage Loan Originators (MLOs), as well as registration for any MLO working in other financial institutions, such as banks or credit unions.

How Did NMLS Come to Be?

The NMLS system launched in January 2008 as a national repository for state mortgage industry licensing. In July of the same year, Congress passed the Secure and Fair Enforcement for Mortgage Lending Act (SAFE Act) of 2008. The SAFE Act also molded the NMLS system to what it is today. This required states to pass legislation mandating MLOs be licensed, but only after the MLO had:

• Completed at least 20 hours of educational courses
• Passed a national mortgage test
• Gave state agencies permission to review their credit report
• Passed an FBI criminal background check with zero felony convictions for seven years prior

In addition, MLOs are required to complete a minimum of 8 hours of continued education annually to maintain their state licensing and can never have a previous felony for financial crimes.

Why is NMLS Important?

Prior to the SAFE Act being passed, there were almost zero resources in place to protect consumers from predatory or misinformed lending practices. Now, consumers may use the NMLS website to investigate any licensed MLO to check their status and credentials. Nearly 640,000 companies and individuals use NMLS annually. You can also check contact information, the MLO’s current place of employment, their work history, qualifications, registration status, and what states they are licensed to do business in.

Our Commitment to You

When you see Homestead Funding’s NMLS number or one of our Loan Originator’s on our website, social media, or videos, know that it’s a sign of our commitment to upholding the highest licensing guidelines set by the state and federal governments. When you’re ready to make your home financing a reality, contact us today.