Financial Condition

Questions about reporting Financial Condition on the mortgage call report.

Q. What does FAS stand for and where do I find this information?: FAS stands for Financial Accounting Standards and refers to specific guidance provided by the Financial Accounting Standards Board (FASB).
Q. I have not filed my taxes yet and won't complete them until April 15. How can I complete the Financial Condition (FC)?: The FC is meant to capture unaudited information about the company and if there are material differences after taxes are completed or you have audited financial statements, then you should amend your FC and provide the corrected information. You must provide complete information in a timely manner to your state regulator and failure to file on time will result in a deficiency placed on your company license.
Q. My company earns revenue from sources other than mortgage origination. I don't see a place to enter this information – what should I do?: All mortgage-related income should be reported. There are three specific categories for reporting mortgage-related income: 1. Origination Related; 2. Secondary Market Gains/Losses on Sale; and 3. Servicing Related. If the revenue doesn't fall into one of these categories, you should report it in field C770 (Other Non-Interest Income).
Q. If I don't receive fees directly from the borrower, do I have to complete fields related to this topic (e.g. C210, C220, C230)?: The definitions do not limit this information to borrower received fees.
Q. We are unsure what to enter for non-corporate personnel compensation under Schedule D. Can you provide general clarification?: This section requires your company to report compensation expenses (e.g., salaries, etc.) paid to individuals serving in an origination, secondary marketing or warehousing capacity.
Q. Does the FC filing accept decimals or negative values in fields?: The system does not allow decimals and you should round the amounts to the nearest dollar. The system does accept negative values in the FC component.
Q. I am confused with C200. Do I report values for my mortgage business, my real estate business or my other businesses?: This section refers to originations-related non-interest income; and if your company uses fair value accounting for loans held for sale.
Q. My company files parent company financial statements either through the MBFRF or to state agencies. May we use these for the NMLS MCR?: No. The Financial Condition component of the NMLS MCR must be reflective of the licensee and its consolidated subsidiaries and joint ventures in accordance with generally accepted accounting principles (GAAP) and MCR instructions. If the licensee does not have its own consolidated financial statements, but is included in its parent’s consolidated financial statements, these statements must include a supplemental balance sheet and income statement for the licensee.
Q. I just uploaded my independently prepared financial statement into NMLS. Do I also need to amend the FC section of the MCR?: If your independently prepared financial statement is materially different from what you filed on the MCR, then you should amend your previously filed MCR FC section so that it agrees.
Q. When reporting data in the Financial Condition for a licensee required to report it quarterly, should the information be reported based on the filing quarter or year to date?: Schedules A (Assets) and B (Liabilities and Equity) are reported year-to-date as of the end of the reporting period. Schedules B-350R (Equity Rollforward), C (Income), D (Non-Interest Expense), and O (Reserves and Valuation Allowance Rollforwards) are reported for only the three-months ending as of the end of the reporting period. Aggregate income, expenses, and net income from each quarter making up the licensee’s fiscal year should materially agree to the licensee’s consolidated income statement.
Q. How do I report the Loans Eligible to Repurchase Right From GNMA asset and corresponding liability in the MCR-FC?: At this time, there are no specific MCR-FC fields for the Loans Eligible To Repurchase From GNMA asset and corresponding liability. However, the federal report MBFRF v2.6 has specific line items for these amounts (GNMA Loans Eligible For Repurchase field A235 and Liability For GNMA Loans Eligible For Repurchase field B195). At this time, a licensee may either omit these amounts from the MCR-FC or include them as both a short-term asset and liability.
Q. How do I report other comprehensive income (loss) of the licensee in the MCR-FC?: The income statement of a licensee’s financial statement may include an other comprehensive income (loss) amount below net income. This amount typically represents unrealized revenues, expenses, gains, and losses that affect a company’s assets, but are not yet recognized on the income statement. This amount should be included in the MCR-FC Equity section field B300 with the effect on assets already reflected in their balance.
Q. How do I report escrow funds held in trust which are not assets of the licensee in the MCR-FC?: The balance sheet of a licensee’s financial statement may include escrow funds held in trust which are not assets of the licensee. Such amounts could be reported as a memo item on the MCR-FC field A250 Escrow Funds (Held in Trust for Investors or Mortgagors) which is not included in assets or liability totals.
Q. My company has subsidiaries and/or joint ventures included in its consolidated financial statements in accordance with generally accepted accounting principles (GAAP) which are not wholly owned. How do I report the non-controlling interests in the MCR-FC?: A company's audited financial statement may report non-controlling interests by separate line items within the equity section and below net income on the income statement. These amounts represent the portions of entities not owned by the company. These amounts should be reported in the Noncontrolling Interest MCR-FC fields B310 (equity) and D560 (income(loss)). Accordingly, consolidated net income in the MCR-FC should be the total of amounts attributable to both controlling and noncontrolling interests.
Q. How do I view all MCR-FCs, MCR-RMLAs, and uploaded financial statements my company has filed in NMLS?: When logged into as licensee on NMLS go into an inquiry-only view: Composite View tab (top row of tabs on right), View Company (second row of tabs on left), and MCR Filing History or Financial Statement Summary (links on left).