When you talk to a loan officer about getting a mortgage, fill out an application, or discuss rates – the person you’re talking to is a licensed Mortgage Loan Originator (MLO). And in addition to their educational requirements, they have professional standards to follow. One thing to know is that the testing, education, and requirements are similar to getting a realtor’s license.
What is an NMLS Number?
When you see a loan officer’s name on their email or business card, there are six digits after their name. That’s their NMLS ID number. Today we will discuss what it means to be an NMLS licensed loan officer. We’ll go over how licensing came to be. We’ll also talk about all the steps of getting a Mortgage Originator’s License. Plus, we’ll discuss the consumer benefits of loan officer accountability.
History
In 2008, the Federal Government passed the Secure And Fair Enforcement for Mortgage Licensing Act (SAFE Act). That was right after the mortgage meltdown. The purpose of the SAFE Act was to make sure the shady lending practices that caused the meltdown didn’t happen again.
So, starting in 2010, mortgage originators were required to get a federal identification number from the Nationwide Mortgage Licensing System (NMLS). Interestingly enough – federally chartered banks had themselves written out of the law. That meant their loan officers need only be registered.
Promoting Accountability
Making the mortgage industry more accountable is the goal behind licensing. That’s why this law requires each loan officer to have a unique ID. And that promotes accountability because any record of fraud or deceit reports under that number.
And since it is a national database, the number follows the loan officer even if they move to another state.
Consumers can look up the record of any loan officer at NMLS Consumer Access.
What Does it Take to Get an NMLS License?
Let’s look at the basic requirements:
- Register with the NMLS. That allows tracking of origination activities.
- Complete a 20-hour NMLS approved pre-licensing education.
- Take and pass the national examination.
- For any state, the loan officer wants to lend in – pass the state exam.
- Pass a credit check.
- Have and pass a criminal background check.
- Complete yearly CPE (Continuing Professional Education).
What Company Are They Lending For?
It’s quite an accomplishment for someone to pass the test. That – plus getting through the rest of the licensing requirements. But keep in mind – studying and passing a test don’t teach a person everything they need to know. Although we do have to acknowledge – that test is hard!
That’s why newly licensed people must work with a lender like Homestead Financial Mortgage. That said – one of the things that set us apart is the owners at Homestead make sure our loan officers get any training and mentoring they need. Senior loan officers and managers are available to help them on every loan they originate.
In closing, with Homestead, you can feel confident working with all our loan officers – even the newly licensed ones. That’s because behind every new loan officer are owners, managers, and senior loan officers with experience offering help and support.
We’re always looking for friendly, hard-working loan officers to join our team. Contact us today if you’d like to join our team or need a great deal on a home loan.