Due to the devastation caused by the financial losses stemming from bad residential mortgage loans and in an effort to have more control over who can originate mortgages in the future the Federal Government has come up with a new set of requirements for people that want to originate Residential Mortgage Loans. Anybody that wants to earn money from originating loans in 2011 and beyond must be licensed with the new federal oversight agency, the Nationwide Mortgage Licensing System(NMLS).
There is alot you need to know to prepare yourself to be in compliance with these new regulations, here are some links that will point you in the right direction
NMLS Resource Center – Main Home Page
NMLS Resource Center – California
Info on Senate Bill 36 “The Safe Act”
Steps for Safe Act Compliance for Mortgage Loan Originators
Summary of Important recent regulations affecting licensees under the jurisdiction of the California Department of Real Estate
A couple training options for Mortgage Loan Originators in the state of California:
For existing California licensees if you take care of all licensing requirements by September 1st 2010 (9/1/2010) you get to forgo the 20 hours of classroom education requirement.
If you fail the NMLS test you have to wait 30 days to re-take it.
As part of obtaining this license they are going to pull your credit. I’ve attached a document that describes what they are looking for on your credit report.
Is this good or bad news for Mortgage brokers?
I say good for the following reasons:
- Less competition: These regulations will eliminate many unlicensed operators and add an increased level of oversight for Originators that allow unlicensed individuals to originate under their license.
- Increased accountability: The NMLS registration requirements in addition to the 2010 RESPA guidelines make it much more difficult for unlicensed, unscrupulous operators to do bad things under the radar and never be held accountable. It also means that Loan Officers at large financial institutions have to go through the same scrubbing process.
- Quicker Return of the Secondary Market: If investors of fixed income securities have a higher level of confidence that there is a more systematic, responsible origination process in place for residential mortgage underwriting and origination they will be more likely to purchase non-agency pools of loans which will allow new and exciting loan products to be re-introduced to the marketplace.