An RMLO is a Residential Mortgage Loan Originator that meets federal and state requirements to originate mortgage loans. They are licensed by individual states and administered through the National Mortgage Licensing System (NMLS).
When is an RMLO required?
In response to the mortgage and housing crisis of 2008, lawmakers passed the Dodd-Frank Act in 2010. Included in the Act was language that affected some seller-financed transactions.
The Consumer Financial Protection Bureau (CFPB) was charged with overseeing the Act, and in January 2013, the CFPB issued regulations to implement the Dodd-Frank Act with amendments to the Truth in Lending Act (Regulation Z). Dodd-Frank laws for seller financing took effect January 1, 2014.
An excerpt of some important information on how the Dodd Frank Act applies to seller financing follows. To download the guide from Nov 8, 2013 in PDF, Click Here.
These rules only apply to financing on residential property the buyer intends to reside in, and require a loan originator license, with two important exclusions from the law. One is for individual sellers that sell only one property in a 12-month period and the other for seller financing entities that sell 3 or fewer properties in a 12-month period.
