Staying in Compliance: The Mortgage Call Reports

As a licensed mortgage broker in Texas since 2000, I was accustomed to having to prepare a mortgage report for the state each year prior to February 28.  Texas required that each mortgage broker prepare a report for himself and each loan officer who was licensed under him.  Since Texas also required that we log incoming files, closed files, and withdrawn or denied files, we learned to set up our filing system to make year end report preparation easier.  For example, for a few years Texas was tracking the number and dollar amount of Texas cash out loans closed.  To make it easier to prepare these reports, we set up a log devoted especially to Texas cash out loans.  At the end of the year, I knew that all I had to do was count those files and total the dollar amounts in order to submit my report to the state.  Likewise, Texas tracked jumbo files, so I had a log devoted to jumbos so that I could prepare that part of the report easily.

Since I always knew that I had to do the report, and since we were organized in such a way to make preparation less painful, I got used to preparing the report each year during the first week of January when the forms became available on the Texas state mortgage lending website.  I was very surprised, therefore, to see that this year no report was posted.  I waited a couple of weeks to see if they were just behind in setting up the report, since I knew that the state regulators had their hands full with getting the state licensees converted to the NMLS system, but after a couple of weeks when the website still showed no links for our broker report, I called the state.  "You don't have to do one this year," the young man working in broker compliance cheerfully informed me, "Isn't that great!"

Actually, it was kind of great.  Of course I knew that NMLS would have its own reporting system, and that system is now in place.  Instead of our former state reports that we as designated brokers produced, we will now be completing the Mortgage Call Reports.  Mortgage Call Reports are to be prepared quarterly by each loan originator.  The first report will not be available until May 2; it is due by May 15.  Failure to complete a report and upload it in a timely manner is cause for license suspension. (The same was true in the case of our Texas annual reports.)

While the NMLS system is not yet ready to receive our uploaded reports, they do have sample PDF files on line that we can look at to the see the type of information required.  For a true broker, as I am, the report is not really all that bad.  As in the case of the old state reports, we have to complete the dollar amount and number of each type of loan originated (conventional, FHA, VA or Rural).  Reverse mortgages are in a separate listing.  Home purchases and refinances are broken out separately to be listed by number of such loans originated and dollar amount of the loans.

One noticable difference between the state report and the NMLS call report is that the call report requires that we state the total dollar amount of the broker fees and lender fees on our transactions for the quarter.  Listing our compensation seems to be to be an odd requirement for a federal report and it is going to require that we have our HUD settlement statements at hand while doing our computations.  The report also asks us to list the number of applications in process at the beginning of the quarter, the number of approved applications withdrawn by applicants and the number of denied applications.  This is a big departure from our state report which required information on closed loans only.

The facts I have presented above apply to mortgage brokers only.  Bankers and companies which sell directly to Fannie Mae and Freddie Mac have to complete a more difficult detailed report.

Fortunately, (I guess) the first quarter has been slow, so compiling all of the information for the report should not be that difficult.  And to assist us in preparation of our Call Report NMLS is scheduling workshops to teach us how to complete the forms. Information on the workshops has been posted to the NMLS website:

http://mortgage.nationwidelicensingsystem.org/news/events/Pages/MCRWorkshop.aspx.   Workshop trainers include Tim Lange, Senior Director--Policy, State Regulatory Registry LLC, Tia Ryan, Manager--Operations State Regulatory Registry LLC, Rich Cortes--Principal Financial Examiner, Connecticut Department of Banking and Darin Domingue--Deputy Chief Examiner, Louisana Office of Financial Institutions.

The workshops are basically a moderated conference call and webinar.  Participants will learn the following:

1. Policies regarding who needs to submit the Call Report and when
2. Directions on which portions of the Call Report need to be completed by which companies.
3. Resources for how to complete the report, including field definitions.
4. Overview of the options for uploading the Call Report data to NMLS
5. Understanding how the data is used by regulators.

The cost to participate is $35.00, but considering that our licenses and ability to work hinge on getting this right, that is money well spent.  Following are the dates for the workshops.

Thursday, April 14, 2011 from 2:00 - 3:30 pm ET
Thursday, May 5, 2011 from 1:30 - 3:00 pm ET
Tuesday, May 10, 2011 from 1:30 - 3:00 pm ET

Participants must register to take the webinar, and participants need to create a log-in ID on the CSBS website.  You cannot use your NMLS log in ID to register.  The dial-in number and link to the webinar will be emailed to registrants 48 hours before the workshop, so anyone out there wanting to participate in Thursday's webinar needs to register ASAP.

I realize that there are some great discussion groups out there on various social networking sites about completing the Call Report.  But it can never hurt to get facts and training straight from the regulators. 

I would like to especially thank David Dulock and the team of Black Mann & Graham for providing me with the information for today's post.

Good luck to everyone.

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