Texas rule allowing use of a third party RMLO?

6 Replies

Must be licensed as a Mortgage Company, Mortgage Banker or regulated by a federal banking agency to sponsor an RMLO. 

Allowing an unregulated entity to "hire" (sponsor) an RMLO  is contrary to the intent of the SAFE Act. 

Originally posted by @Mark Buskuhl :

Allowing an unregulated entity to "hire" (sponsor) an RMLO  is contrary to the intent of the SAFE Act. 

I was unclear about the definition I meant of "hiring" an RMLO.  I did not mean I am looking to sponsor one.  What I meant is I would like to use their services to originate a loan for us.

Reading the HUD rule in the link I posted, it says we do not need a license if we are:
Offering or negotiating loan terms solely through a third-party licensed loan originator, so long as the nonlicensed individual does not represent to the public that he or she can or will perform covered activities and does not communicate with the borrower or potential borrower.

I am looking for some Texas rules that also say we are are allowed to use a third-party licensed originator and not be licensed ourselves.

I also found this:

http://www.tdhca.state.tx.us/safe-act.htm

It states:

"Residential mortgage loan originator":

  1. (A) means an individual who for compensation or gain or in the expectation of compensation or gain:
    1. (i) takes a residential mortgage loan application; or
    2. (ii) offers or negotiates the terms of a residential mortgage loan; 

That seems to say that we are not an originator by simply being a lender as long as we do not do either of the items listed above.

Anyone know of any other specific info?

Thanks,
  Neil

@Neil Aggarwal   just curious how are you going to make a loan if your not negotiating terms.

and does this not only apply to owner occ in your state.. in Oregon it applies to the property IE ANY 1 to 4.

its a tough one I am a mortgage banker .. but its a pain keeping those licenses active and working to just do 10 loans or so a year.. you need some volume in my mind to make this worth doing.

and you can't be a mortgage banker like me without getting experience first.. as a rmLO although i was grandfathered in.. and was never an RMLO my CA broker experience as a HML gave me the leg up in Oregon.

there really needs to be some sort of carve out.. folks want to obey the rules but then there is no way to get a licensed RMLO to do these deals because their brokers usually own't allow it.

Originally posted by @Jay Hinrichs :

@Neil Aggarwal  just curious how are you going to make a loan if your not negotiating terms.

We do not negotiate loan terms with or talk to a borrower.  We tell the RMLO what our loan program is and they communicate that info to the borrower.

I believe in Texas, the rule is not dependent on the type property, it only depends on it being owner occupied.

Regarding finding an RMLO, there are companies that have created an industry of providing RMLO services to originate loans for lenders.

@Neil Aggarwal   sounds like a good niche.. its really state specific of course as well.. best of luck with your loans

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