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Exempt Entities

September 20, 2010

To: Exempt Entities
From: Kevin M. Murphy
Deputy Commissioner of Commerce
RE: SAFE Act, NMLS and Exempt Entities

As you know, Minnesota will be participating in the Nationwide Mortgage Licensing System (NMLS) as of October 1, 2010. While certain entities may be excused from the requirements outlined in Chapters 58 & 58A, all Exempt Entities must still register with the NMLS as an "Exempt Entity" and obtain a unique identifier number.

MLOs with Exempt Entities

Mortgage loan originators (MLOs) who are employees of an exempt entity as defined in Minnesota Statute 58A.02, subd. 12(1) are not required to maintain a license through the State of Minnesota but must register through NMLS.

Examples of a registered MLO include: an employee of

(i) a depository institution,
(ii) a subsidiary that is owned and controlled by a depository institution and regulated by a federal banking agency; or
(iii) an institution regulated by the Farm Credit Administration.
MLOs employed with an industrial loan and thrift company, as licensed under MN Statutes Chapter 53, or regulated lenders under MN Statutes Chapter 56, are NOT exempt and MUST hold licensure through the state.

The steps for registration and licensure are outlined on the NMLS website.

The Conference of State Bank Supervisors (CSBS) will host a webinar in September for those seeking assistance with the NMLS system. The date is September 28, 2010. Information regarding these workshops can be found under "News & Events" on the NMLS website.

Surety Bond

In accordance with Minnesota Statute 58A.13, subd. 1(a) each MLO must be covered by a surety bond meeting the requirements for mortgage originator companies as stated in 58.08. A bond, in the amount of at least $100,000, must cover all MLOs who are employees or independent agents. Bond amounts may be adjusted at a later date according to loan volume once the mortgage call report has been filed. MLOs not covered by a company bond are required to carry an individual bond.

The current bond form is available here.

Surety Bond

Date: September 8, 2010
To: All Licensed Residential Mortgage Originator Companies,
From: Kevin M. Murphy, Deputy Commissioner of Commerce
RE: Surety Bond

Minnesota Statute Chapter 58.06, subd. 2(c)(1)(v) requires all residential mortgage originator companies to maintain a surety bond in the amount of at least $100,000. This is an increase from $50,000. Letters of credit and net worth options are no longer available and originators may not add to their existing bond simply as a rider. Mortgage originators must obtain a bond from their insurance company using the form available in the right column. The bond currently on file with the Department of Commerce is no longer compliant with the new requirements of Chapters 58 & 58A. As stated in 58.08, subd. 1a(a) the bond must cover all mortgage loan originators who are employees or independent agents of the company.

In accordance with Chapter 58A.13, subd.2, mortgage originators may adjust the amount of their surety bond upon filing the mortgage call report to reflect the total dollar amount of closed residential mortgage loans originated in the state of Minnesota in the preceding year, as is required by Chapter 58A.17. Surety bond requirements are as follows:

Dollar Amount of Closed Residential
Mortgage Loans
Surety Bond Required
$0 to $5,000,000 $100,000
$5,000,000 to $10,000,000 $125,000
$10,000,000 to $25,000,000  $150,000
Over $25,000,000 $200,000

 Mortgage originator licenses will not be extended through December 31, 2011 until the Department of Commerce receives the $100,000 bond.

Transfer Documents for NMLS

Information and documents related to the transfer of licensing process to the Nationwide Mortgage Licensing System.

March letter to licensees
Information related to the Mortgage Call Report. (March 8, 2011)

December letter to licensees
Updated information about transition to NMLS. (December 10, 2010)

October letter to licensees
General information about transition to NMLS. (October 26, 2010)

September letter to licensees
General information about transition. (August 30, 2010)

MLO Test-MN Component
Description of areas covered in the SAFE Mortgage Loan Originator Test. (August 24, 2010)