New Laws Require Licensing for Loan Officers
Loan officers will now be required to attend continuing education approved by the Nationwide Mortgage Licensing System. Further, all loan officers who are employed by brokers are required to pass a National exam and a State exam. Until recently, only brokers required testing. Having just completed both exams, I can attest to the challenge they provide.
I am excited for new and prospective home buyers as they reap the benefits of government changes. At a time when America distrusts the big banks and the banking system as a whole, the government has given us a reason to have faith and trust in mortgage banking.
Some key requirements for licensed loan officers include:
- A legal record clear of felonies
- Exceptional credit history
- FBI background search and fingerprinting
It is comforting to know that your mortgage professional—the person privy to your most private financial information—meets all of these requirements. The next time that you apply for a loan ask your loan officer if he or she is a licensed mortgage loan originator.
You may find that when you apply with the large institutions, your loan officer may not be licensed. The law does not mandate loan officer licensing for those who work for banks under a federal charter. Use your best judgment on who to trust.
For more information on the SAFE act, you can access the text of the law through the U.S. Department of Housing and Urban Development.