Many mortgage companies mistakenly assume that an employee’s NMLS approval replaces the need for a company-level pre-employment background check. It does not.
The NMLS criminal background check is primarily a licensing and regulatory screening tool conducted to satisfy SAFE Act requirements for mortgage loan originators (MLOs). A company pre-employment screening program is broader and should be designed around fraud prevention, consumer protection, data security, and operational risk.
An NMLS background check generally focuses on:
Fingerprint-based FBI criminal history
Financial responsibility disclosures
Regulatory actions
Licensing eligibility standards
However, the NMLS process may not fully evaluate:
Employment history accuracy
Civil litigation
Internal misconduct
Reference checks
Prior termination reasons
Cybersecurity concerns
Position-specific fraud risks
Non-MLO operational employees
For example, processors, closers, IT personnel, accounting staff, and compliance employees may have significant access to borrower funds or nonpublic personal information (NPI), yet may not be subject to NMLS licensing requirements at all.
A mortgage company should therefore maintain its own written pre-employment screening procedures based on role sensitivity and risk exposure.
Vendors
Lite - DataCheck - backgroundchecks.com works as long as you fill in the other required background checks such as SAM.gov, etc.
Full - DataCheck 28202 Cabot Road #245 Laguna Niguel, CA 92677 800-253-3394 www.datacheckinc.com