Interview with Jillayne Schlicke – Part 2: The SAFE Act

Earlier this month I shared an interview with Jillayne Schlicke.  Part One addressed LO’s getting ready for 2009.  The second half of my interview touches on The S.A.F.E. ACT which is a part of HR 3221.  The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 is a part of the massive HR 3221.  If you are planning on originating residential mortgage loans in 2009, which is just over a month away, I hope you’ve all ready checked out the NMLS (Nationwide Mortgage Licensing System) site to get your ducks in a row…be sure to have a large bottle of aspirin (or something stronger) handy.  The NMLS states that to assure your information is processed by January 1, 2009, you need to submit the required information to by December 1, 2008.   I just checked the process of my NMLS license and because I filed at 9pm on October 1, 2008, my registration is currently showing as “transition requested” and I’m directed to contact DFI.  DFI is telling me that I registered on October 2, 2008, and they’re working on applicants who applied by October 1, 2008.  I do hope my fellow Washington State Loan Originators were at least a day earlier than I with registering at NMLS to be in compliance with The SAFE Act.   Enough of my griping…my questions to Jillayne are bold and italic.

Which loan originators are impacted by the SAFE Act?

All LOs will be impacted by the SAFE Act, some more than others.  Looking up the chain of command, mortgage brokers and consumer loan lender manager/owners will also be impacted because this adds a layer of administration at the federal level that was previously not in place.  Today, brokers and owners can call their state licensing regulators and receive an answer to their licensing questions in a reasonable amount of time.  Networking with the federal regulators back in Washington DC may or may not offer broker/owners the same level of prompt service and hours of operation for those on the west coast.

Non-depository lenders and brokers must take a 20 hour prelicensing class and 8 hours of continuing education every year.  Some states already have these provisions in place and other states go above and beyond this level.  STates that have pre and post education requirements that are less than what’s required under the SAFE Act must raise their standards to the federal level.

The banks asked for and received exemption from the prelicensing and continuing education requirements mandated by the SAFE Act.  It’s quite possible that FDIC insured banks pointed out they already have ongoing training in place for their employees.

All LOs, no matter where they work, must become registered.

Even with the additional costs and time, this is a step in the right direction for our industry.  It’s time to support the framework that will lead to the eventual repair of consumer confidence in our lending system that must begin at some point.  This is a good place to start.

How will the SAFE Act impact your business?

I’ve been thinking about this for several months.  The 20 hour prelicensing mandate will have very little effect on educators at this time.  There are very few people interested in becoming loan originators right now because the income potential for a new licensee who knows relatively little about the complexities of the industry have dropped dramatically in 2008.

The 8 hours of required continuing education is only 2 more hours per year than Washington State’s 6 hour requirement.

Instead of higher revenues, the changes that will impact continuing education will be that of curriculum development and approval.  It appears right now that the states are going to defer to NMLS to approve our courses and to approve course providers, although this has not been confirmed.  Dealing at the state level is always preferred to dealing at the federal level because the states tend to be more responsive.  We can go to regular scheduled meetings and talk directly to our regulators, we can schedule meetings with them and drive to Olympia if needed, to voice concerns and receive direct answers.

I already see a difference.  When asking questons of the NMLS folks they pawn me off to the states.  The state says to call NMLS.  The whole system is suppose to be ready to go in 2009 yet at no point has the NMLS  communicated to us (course providers) what the guidelines will be for approving providers and courses.

The other problem educators face is the mandate on curriculum.  But that’s another topic for another interview.  🙂

14 thoughts on “Interview with Jillayne Schlicke – Part 2: The SAFE Act

  1. Pingback: Interview with Jillayne Schlicke - Part 1: LO’s Are You Ready for 2009? | Rain City Guide

  2. My broker spent several days registering four LO’s and part of his frustration was being sent back and forth between DFI and NMLS. There are a lot of bugs that still need to be worked out. It is a very complicated procedure requiring imput for LO’s as well.

    So Rhonda is right. Start now and be patient because it will not be a smooth procedure this year.

  3. I get the distinct impression that the feds are going to take over licensing (of the non-depository lenders.) This is an astronomically huge project.

    I wonder how the year end transition will go if it’s like this now….Hmmm.

    Rhonda, why did DFI refer you to the NMLS?

  4. I contacted DFI to find out where to renew my license and register my CE credits. They told me I needed to do that on the NMLS. NMLS showed me with a status of “transition requested” and instructed me to go back to DFI. When I went back to DFI, they told me they are still processing transfering LO’s over (must be the background checks, etc) and are only doing those who applied on NMLS by October 1 or sooner. I told them I did that on October 1 and they told me that they show me as October 2.

    I’m probably going to forward them my confirmation today…I was so frustrated yesterday that I think I need to take a DFI/NMLS break! 🙂

    The NMLS site alone is enough to drive any normal person batty. There is no flow to the site. It bounces you all over the place with lengthy instructions of all the various places you must check through before you can complete anything.

  5. The NMLS is a case study in fusterclucks. Seriously, whoever designed that site needs to dragged out back and shot. The instructions were written by lawyers. The interface was designed by computer geeks who haven’t seen sunlight in years. The whole process is just backwards. I am still trying to decipher what the hell an MU2 and MU4 is in plain english.

    Every other day I get some email from some other state that decided LOs need to take a test or 24 hours of courses. I spend more time trying to make sure I am compliant with all these stupid state laws than it is worth.

    Just shoot me already…

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