![]() ![]() If the same pass rate for the test was applied to depository loan originators, statistics would suggest there could be as many as 125,000 loan originators practicing who would have not have passed an exam designed to measure minimum competency, he said. There are about 130,000 independent loan originators, compared to approximately 400,000 loan originators who work at depository institutions. Statistics from the NMLS 2015 annual report indicate the first-time pass rate on the National SAFE ACT Test was 67.5% for about 44,000 tests taken between Apand Dec. He believes this could potentially create an unbalanced playing field and could mean some loan originators at these institutions do not meet minimum qualification standards. McNulty noted, however, that mortgage lenders for depository institutions are not required to meet the same educational and testing requirements as state-licensed MLOs. If I am a wholesale or correspondent lender, I want to make sure a company or individual is licensed before I set up a business relationship with them or I fund a particular loan.” “The industry uses it as well and that benefits the consumer. ![]() “This provides transparency and it provides a wealth of information to better inform the consumer on how to make the decision,” Matthews said. They also must furnish the NMLS with an independent credit report obtained from a consumer reporting agency, and provide information related to any administrative, civil or criminal findings against them.Ĭonsumers can look up individuals or companies to see if they are licensed or registered with the NMLS, as well as check on their employment history, enforcement actions taken by the state, where they are licensed and what type of licenses they have. The SAFE Act also requires state-licensed MLOs to submit fingerprints to the NMLS for submission to the FBI for a criminal background check. “It is akin to obtaining a license to be a financial advisor or real estate agent.” “The NMLS has established the program and enforced a certain number of hours of prelicensing education and required the passage of a licensure test for state-licensed MLOs,” Michael McNulty, vice president of client services for OnCourse Learning, a leading provider of prelicensure and continuing education to the financial services industry. In addition to registering with the NMLS, they must pass a national written mortgage exam, complete prelicensure education courses, and take annual continuing education courses. Meanwhile, MLOs who work for nondepository, state-licensed loan origination companies are subject to additional educational and testing requirements. Loan originators who work for depository institutions and their subsidiaries, such as federally insured banks, credit unions or savings and loans, must register with the NMLS. ![]() ![]() The SAFE Act is designed to increase consumer protection and reduce fraud by setting minimum practice standards for mortgage loan originators nationwide. It also serves as the system of record of registration for loan officers who work for depository institutions under the SAFE Act. Created by the SAFE Act, the NMLS is the nationwide online system of licensure for state-licensed non-depository companies, branches and individuals in the mortgage, consumer lending, money services businesses and debt collection industries. Matthews oversees the operation, development and enhancement of the Nationwide Multistate Licensing System. Since the housing crisis of 20, there have been significant changes to federal law that have impacted mortgage lenders.Īmong those changes was the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, which established a nationwide licensing and registration system for residential mortgage loan originators.īefore the passage of act, there was often no way for borrowers to tell who was qualified to work as mortgage loan originators on a nationwide basis, according to Bill Matthews, executive vice president of the Conference of State Bank Supervisors, the national organization of banking regulators from all 50 states, the District of Columbia, Guam, Puerto Rico and the U.S. ![]()
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