An RMLO – Residential Mortgage Loan Originator, is and individual who takes a residential mortgage loan application and offers or negotiates terms of a residential mortgage loan for compensation or gain. An RMLO is also an individual who provides clerical or support duties as independent contractor loan processors or underwriters. RMLOs are required to be licensed under the Texas SAFE Act. In Texas, there are two agencies that issue RMLO licenses: 1. Texas Department of Savings and Mortgage Lending (TX-SML); 2. Texas Office of Consumer Credit Commissioner(TX-OCCC). An RMLO with a TX-SML license under Finance Code Chapters 156-157 is authorized to broker or lend 1st lien mortgage activity, regardless of interest amount. An RMLO with a TX-OCCC license under Code Chapter 342 authorizes residential mortgage loan activity for 2nd lien mortgages with interest rates above 10%. A holder of a TX-SML license is also authorized to broker or lend for 2nd lien mortgage activity. OFN Processing Services is licensed through TX-SML. Individual RMLOs, Mortgage Companies and their branches are required to have a unique identifier that is permanently assigned by the Nationwide Mortgage Licensing System & Registry (NMLS). A loan originator is required to have a license. An individual that works for a licensed company as a processor or underwriter is not required to have a license. All individuals acting as RMLOs have had a national criminal history background check through the Federal Bureau of Investigation. The Texas SAFE Act prohibits the licensure of individuals who have: 1. Been convicted of, pled guilty or no contests to , a felony in a domestic, foreign, or military court during the seven-year period preceding the date of application; or 2. At any time preceding the date of the application, been convicted of, pled guilty or no contest to, a felony in a domestic, foreign, or military court involving fraud, dishonesty, breach of trust, or money laundering. The Texas SAFE Act requires that all RMLOs complete at least 20 hours of NMLS approved pre-licensure education. To maintain the license, RMLOs have to complete eight hours of NMLS approved Continuing Education annually. The simple definition for the Owner Finance Investor – an RMLO acts as a loan processor that gathers information on a prospective Buyer to provide the Seller. The role of the Investor is to review and approve disclosures provided by the RMLO. The
RMLO provides an underwriting package to the Investor and provides an assessment of the Ability to Repay by the Buyer The Investor approves the loan, not the RMLO. The RMLO helps the Investor stay compliant with all the mortgage compliance issues such as CFPB Consumer Laws and Regulations, The Dodd-Frank Act, Texas SAFE Act, and RESPA. In summary, the RMLO is licensed to originate mortgage loans based on the entity that issued the license, have a had national criminal history background check through the Federal Bureau of Investigation, and has a unique NMLS identifier.
