The SAFE Act was enacted in July 2008 to help create a national standard for residential mortgage originators. This is a fantastic idea EXCEPT that if a mortgage originator works for a depository bank, like Bank of America, Chase, Citi or Wells Fargo (just to name a few) they are excluded from licensing. Mortgage originators working for a bank will only have to be registered...and yes, there is a difference.
In Washington state, Licensed Mortgage Originators, per the SAFE Act, are required to:
- submit fingerprints for a state and federal background check
- submit personal history and experience (MU-4 form)
- will have a unique identifier number. (I'm NMLS MLO-121324)
- demonstrate financial responsibility (LO's will have their credit checked)
- take 20 hours of approved pre-licensing education
- pass the state and national mortgage exam by 75% or better
- will take 8 hours of continuing education annually
- may never have had a license revoked (I've been licensed with DFI since 2007)
Registered Mortgage Originators aka Federal Mortgage Originators (those who work for depository banks and who are not required to be Licensed) per the SAFE Act, are (eventually) required to:
- submit fingerprints for a state and federal background check
- submit their personal history and experience (MU-4 form)
- will have a unique identifier number
A registered mortgage originator banker will probably tell consumers that they don't need to do all the measures that a licesned mortgage orignator does because it's in house (ask them and listen to their response) --so why not be held to the same standards as a licensed mortgage originator? Why not try passing the national and state exams? NOTE: If a non-licensed mortgage originator (registered mortgage originator/banker) tries to tell you that mortgage brokers are licensed because they are the cause of the mortgage crisis, please remind them that it was the mortgage banks that created and underwrote the mortgage programs AND it is the mortgage banks who hired their reps to call on mortgage brokers to push their programs.
If Congress truly wanted to serve the people, they would have created the same standards for all mortgage originators regardless of campaign contributions, lobbyist, the type of institution they're employed by. Consumers should not have to sort out the differences between a Licensed or Registered mortgage originator. ALL MORTGAGE ORIGINATORS SHOULD BE LICENSED.
Here's what my profile looks like on the NMLS Consumer Access site. You can click the image below to see a larger image or visit http://www.nmlsconsumeraccess.org/ and either enter my name and Washington State or my NMLS LICENSE Number: 121324.
Towards the bottom of the NMLS Consumer Access site, you can see if your mortgage originator is licensed and which states they are currently licensed to originate mortgages in. If the mortgage origninator is not licensed and are only required to be registered, it will state: "Federal Mortgage Loan Originator". If your LO is a Federal Mortgage Loan Originator, they are not held to the same standards per the SAFE Act as a Licensed Mortgage Loan Originator. Period. When a "FMLO" tells you they've been regulated far longer than MLOs, simply point to Washington Mutual, Countrywide or World Savings and how successful the federal regulators were overseeing mortgages for those banks.
I encourage consumers to do their own research on mortgage originators BEFORE they start working with them. Depending on various factors, at the time of the publishing of this post, they may or may not be entered into the registry (especially if they work for a bank). Do check them out. Consumer Access by the NMLS does provide you with a history on your mortgage originators IF they're in the system. If they're not in the system find out why. And of course, you can always "Google" the mortgage originators name to try to learn more about them.
Mortgage licensing is actually the very issue that launched me into blogging over three years ago. I was bothered by the misinformation by the media that "all mortgage originators" are licensed which was not true.
Who would you rather have assist you? A mortgage originator with a license they must maintain (or they risk losing it) or someone who is simply registered
Related post: Are Washington Consumers safer working with a DFI Regulated (Licensed) Loan Originator
