🚀 Val’s Vibe Episode 13: NMLS Updates & Industry Insights! 🎙️

 In this episode, Val dives into key takeaways from the NMLS User Conference in Atlanta!  She breaks down the processing fee increases coming March 1, the major system changes rolling out through 2029, and what they mean for mortgage professionals. Plus, she shares insights on AI in the mortgage industry, the future of licensing, and the role of state regulators in enforcement.

 What’s next? Phase 2 NMLS updates coming in Q3 2025 New navigation, checklists, & employment management features AI’s impact on compliance & consumer interactions Stay ahead of the changes! Tune in now for all the details and make sure you're prepared. Have questions? Connect with Val at valsaun@gmail.com or visit valsaun.com! Listen now on YouTube, Facebook, Instagram, TikTok, and all major platforms!  #ValsVibe #NMLSUpdates #MortgageIndustry #AIinLending 

Transcript

  📍 Hey everybody, welcome to another edition of Val's Vibe. This is Valerie Saunders. On my last episode, I mentioned that I was going to be attending the NMLS user conference in Atlanta, which I did last week. And so I thought I might give you a couple updates on some of the information that I learned as part of the event.

First thing I want to mention is last year, NMLS did send out a, or create a public comment period where CSBS, who is the board that runs NMLS, along with the state regulatory registry with their intention of doing a processing fee increase. That increase did get approved on December 11th, and those processing fee increases are going to go into effect March 1.

In NMLS's defense, Not that they need my defense, but in their defense NMLS did start back in 2008, for those of us that remember. And but they have not had any pricing increases since the inception of NMLS. The increases in the fees are fairly nominal, especially if you're somebody like me, just licensed in one state.

For example, if you're doing a a company licensure, it's going from $100 to $120. Individual processing fees go from $30 annually to $35. Same as if you're doing an MLO change of sponsorship, $30 to $35. And then the branch processing fees are going from $20 to $25. So these, as I said, are nominal increases, but if you are licensed in multiple states or you have a large number of loan originators that are you may be onboarding or leaving or responsible for their licensure.

Of course, any sort of fee increases can add up. So just be aware, those fee increases are going into effect on March 1. The next thing I wanted to bring up was one of the topics that was discussed was what the individual licensing experience is going to look like in 2025 and they had a session that went over about how we and the industry can get prepared for this new experience.

Phase one of the changes for NMLS, the overall look of NMLS, that went into effect in July of 2024. Some of the improvements that they made were new recovery methods, consolidation of accounts. So for those of you who might be like me, who manage my mortgage broker business account, as well as my individual loan originator license account.

Now I just have one login. I choose which account I wish to access, and I can just click straight on there. They also did some infrastructure improvements and according to NMLS, the feedback has been very positive. So now looking forward to Phase 2, the expected delivery of the improvements in Phase 2 are Q3 of 2025.

Ironically, just in time for NMLS license renewal. So some of these changes are going to include improved navigation,  according to NMLS, improved MLO licensing experience. They're going to improve how individual associations are created and managed, and then they're going to incorporate checklists within NMLS.

For people who handle licensure and renewal for a large number of individuals or a large number of states, those checklists are really vital part of the piece of the puzzle that you need. So they're going to incorporate checklists into NMLS. What's next after that phase three is in the planning stages.

It's expected to go into full blown development and access by Q3, 2026. Some of those some of the plans of that roadmap include user journeys, process flows. Task management to replace license items, improving the branch licensing process, and also improving the license flow status for updates.

We'll see what happens there. That is phase three. Phase four is they're looking for 2027. We're going to see improved company licensing experience. Some enhanced state agency task management for branch licensing processes. Phase 5 is expected in 2028 where we're going to see some enhanced agency task management for company licensing.

They're going to make some improvements to the workflow for federal registration. And then 2029, Phase 6. is enhanced company account requests and then enhanced management of license settings. I'm going to share my screen with you just so you can see some of the information that was presented at the NMLS user conference specifically regarding what I am referring to.

Here we can see the planned timeline for calendar year 2025. So phase two, they're still in that development phase until mid July. They're looking at communication of the deployment and planning from April to the end of July, the deployment window the beginning of July to the end of September.

If deployment does not take place during Q3, they will not deploy anything during that fourth quarter of 2025. So no deployment during the renewal process. And then you can see the discussion of phase three planning until the end of April of 2026. And then development throughout the rest of 2026.

And then Through phase two and phase three, all of 2025, you're going to also see ongoing stakeholder engagement and continuous discovery of phase two and phase three. So 2025 is a big time for NMLS as they lead into phase two and phase three changes. How do they measure their success? They're looking at increased customer satisfaction, hopefully a lower call volume into the NMLS call bank, a better user experience, improved navigate navigation, and then of course phase two is, hopefully paving the way for all of these items.

So some of the biggest changes for phase two. They did do a demo. So we're going to see here in phase two, a new look feel process and data collection checklist requirements. Improved employment management. We're also going to continue to see or actually, I apologize. Leading into that new look, feel, process, and data collection, we're going to see some new fields.

Does the individual work remotely? License activity reporting, they're adding are they a service member or do they have a veteran designation? A lot of states now have veteran designations on driver's licenses and they are looking at adding some new disclosure questions, but that was deferred till Q1 of 2026.

We're also going to see a new landing page for individuals and then continue, continually growing on that centralized hub for manning, managing individuals. We're going to see a "My People", a "Find People", and then a task manager. Also some checklist requirements are being added into the system. As I said, checklists are definitely invaluable for those people.

Individuals or companies that manage a multitude of people and Have multi state licenses. We're also going to see improved employment management adding into their business email, business phone, position, title added to the company relationship once again, adding that option. Do they work remotely?

And then continuing on the company relationship and the MU4 employment history. Those are going to become one because it's redundant to have both. And then they did give us a little sneak peek into the development progress with the user dashboard, access management, the individual summary, and collection of the MU4 core data.

That really Finished up. What's happening in phase two and some of those changes. There are some different ways to keep in touch with NMLS. They do have an NMLS user experience group that you can join if you'd like to do that on their website. They do have a blog that you can sign up for.

They do have training modules. And of course, you can also update and confirm your email address in NMLS to make sure that you're not missing any important updates and they went over what you can do to prepare for phase two. Number one, they're defining success. They're looking at management doing reinforcements. And then some of the projects within that phase. Once again, disclosure questions, management of W 2 employment. MU4 employment, pending MU4s with a phase two release, and then updating the NMLS Resource Center.

They're going to have some searchable fields, findable fields, making things more accessible, trying to align with user journeys, so hopefully NMLS or as we can see NMLS is just continuing to try to improve the user experience, making easier, making it easier for the majority of the industry that really just logs into NMLS one time a year when they when it comes time to renew their license.

I highly encourage people as they roll out phase two, go ahead and log in. Take a look at what's happening. If you see any issues definitely reach out to them. Or if you like, join that working group in advance and you can be more part of the process. That's a little bit of what was discussed at the NMLS user conference regarding licensing and the changes.

To the to NMLS itself. There was a lot of conversation about ai. I know that they have, there's been some proposals of some AI model language for some of the states to be able to use. We, of course, find a is an extremely useful tool whether that is looking up underwriting guidelines are making chat bots easier or more accessible to answer people's questions.

But there are some I'll just say scary aspects of AI in that there it is. The software capabilities are becoming so advanced that it is coming time where state licensure or state regulators really need to look at some parameters of how much. AI can be utilized in the online application process, in the communication process, with our borrowers.

Of course, it's us as individuals, real people, who are licensed as state licensed loan originators. We want to make sure that we maintain that viability of consumers being able to communicate with a real person. We don't want to have software so advanced that it exceeds what state licensure and federal regulation allows.

To the point where a first time homebuyer or consumer just in general, doesn't know if they're talking to a real person or they're talking to a bot that just has canned information programmed into it. So I think those are some of the things that are real, we're really going to see worked on.

Here in 2025 and beyond. I know a lot of things are happening on a federal level. And there's a lot of uncertainty there. I do want to mention as far as enforcement goes we as state licensed loan originators, we are subject to the regulatory lending laws. of our state as well as federal. And I believe in all state lending laws, it does give our state regulators the ability to enforce us from complying with state lending as well as federal lending.

Regardless of what's happening at the CFPB or HUD or VA, our state regulator is still there. Enforcement actions are still able to take place. Consumers have a higher likelihood of complaining to a state regulator, more than likely complaining to the CFPB or HUD or VA. And those complaints are going to be responded to much quicker on a state level than they are on a federal level.

I say that just to continue to be diligent, do the right thing for your consumer. If you have questions, please feel free to reach out to me. My email address is V A L S A U N at gmail. com. You can always go to my website, V A L S A U N dot com. Reach out to me through YouTube or any of the other social channels.

I'm on all of them, Facebook, Instagram, TikTok, et cetera. I'm happy to help anyone if you have questions. I will continue to be attending a variety of conferences throughout the year. If you have a conference that you're holding and you think it would be a value for me to attend I'm happy to do so reach out to me as well, as far as that goes.

So I look forward to speaking with everyone next week on another episode of Val's Vibe. Hope everybody has a great end of February and I look forward to speaking to you soon. Thanks and have a great day.