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An Uptick in MLO Licensing Activity

Phil Hall
Oct 09, 2013

If the first quarter data released on July 30 by the Conference of State Bank Supervisors (CSBS) is any indication, the growing trend in the state licensing applications under the Nationwide Mortgage Licensing System (NMLS) is shifting away from companies and more toward the individual mortgage loan officers (MLOs). During the first quarter of this year, the CSBS found the number a seven percent year-over-year increase in MLOs licensed through the NMLS. In comparison, the number of unique companies licensed through the NMLS saw a year-over-year decline of 0.2 percent during the same period. “While the number of companies licensed declined,” said the CSBS in its first quarter data report, “the number of licenses held by companies increased 3.5 percent and the number of licenses held by MLOs increased by 22 percent over the same period, indicating an overall increase in lending authority.” Yes, but where is this increased lending authority centered? The CSBS found that new application activity by MLOs has shown “steady growth” since the first quarter of 2012–83,262 MLO applications were submitting during last year, and the first quarter of 2013 saw a new quarterly high of 27,509 applications. On the flip side, the CSBS found a significantly lower volume of new application activity for companies, with an average of 1,400 per quarter. The first quarter of 2013 saw company application activity at 1,494, barely higher than the 1,440 level recorded in the first quarter of 2012. One of the more interesting aspects of the NMLS data is the geographical spread of the license holders. The CSBS found that 81 percent of companies holding a license in just one state. But while the number of companies with just one license is on the decline (12,838 in the first quarter of this year, down from 13,232 a year earlier), the number of companies holding more than 10 state licenses has seen a slight increase. MLOs holding one license increased a mere three percent on a year-over-year basis during the first quarter of 2013, while the number of MLOs holding more than 10 licenses spiked by 52 percent during the same period. Furthermore, the CSBS found that 75 percent of companies that receive licensing through the NMLS employed between one to five MLOs during the first quarter of the year. However, the number of companies sponsoring a single MLO dropped year-over-year (to five percent) while the number of companies with more than 100 MLOs increased 16 percent during the same period. Ultimately, the CSBS data suggests that despite the tumult that continues to rock the housing market, loan origination is not (by any stretch of the imagination) a dying profession. Indeed, the growing level of MLOs seeking licensing suggests that many people view the mortgage industry as a solid foundation for building a career. And even if the number of companies within the industry should decline–either through the normal cycles of mergers and acquisition or through any new disruptions in the near future–the quantity of originators appears to be solid. If anything, the near-future looks to be a positive environment for the industry. Phil Hall is senior editor of National Mortgage Professional Magazine. He may be reached by e-mail at philh@nmpmediacorp.com.
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