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Making a Licensed Mortgage Loan Officer

When inquiring into mortgage rates or dealing with a mortgage application, you will deal with a licensed Mortgage Loan Officer. On any email or business card, there will be 6 digits behind a Loan Officers name, which is their NMLS ID number. Today we will discuss what it means to be an NMLS licensed loan officer, the history of how licensing came to be, the benefits to the consumer of Loan Officer Accountability, and what goes into getting a Mortgage Originator’s License.

History

In 2008, the Federal Government passed the Secure And Fair Enforcement for Mortgage Licensing Act(SAFE Act) in 2008. This was in direct response to the mortgage meltdown and a high degree of irresponsible lending on the part of mortgage originators. What this meant was as of 2010, mortgage originators were required to have a federal identification number from the Nationwide Mortgage Licensing System, or NMLS. It should be noted Federally chartered banks had themselves written out of the law such that their loan officers need only be registered.

Promoting Accountability

Requiring each loan officer to have a unique ID promotes accountability because any record of fraud, deceit or other notable items would be reported under that Loan Officer’s NMLS number. Any consumer would be able to lookup the record of any loan officer by going to http://nmlsconsumeraccess.org/.

What is Involved in Obtaining a NMLS License

So when you see a loan officer with a business card with his NMLS ID on it, it means that person has:

  1. Registered with the NMLS, allowing his origination and other activities to be tracked.
  2. Completed a 20 hour, NMLS approved pre-licensing education.
  3. Sat for and passed a 100 question federal examination.
  4. Sat for and passed any state exam the loan officer wished to lend in. In our case Missouri, Illinois, Kansas and Indiana
  5. Give authorization for a credit report check, with credit sufficient to, “compel the respect of the community the loan officer is a member of”
  6. Give fingerprints the NMLS to perform a criminal background check and have no major crimes on record or of theft or fraud.
  7. Complete yearly CPE(Continuing Professional Education)

To conclude: In order the originate any mortgage loan in the United States, a mortgage originator must register with the NMLS, for non Federally chartered organizations, they must complete a rigorous education, testing and background check process. In the end the consumer wins because they will have a more educated and accountable service provider.