If Your Loan Originator Isn’t Licensed Today, They Need to Work for a Bank or Credit Union Tomorrow

All mortgage originators who work for mortgage brokers or correspondent lenders/consumer loan companies must be licensed with the NMLS as of July 1, 2010 to take a residential loan application for property located in Washington.   If your mortgage originator works for a bank or credit union, they only need to be registered with the NMLS (which means “do nothing” at this point).

Last Friday, Deb Bortner, Director of Consumer Services for Washington State’s Department of Financial Institutions, issued this statement:

“Unfortunately, many applicants did not submit by the deadline. I want to assure you that, even with the current budget reductions and staffing constraints, our Licensing Team is doing all it can to balance a timely review while complying with the recent provisions of state and federal laws that are designed to provide increased consumer protection. While we will process as many applications as possible by July 1st, we will not be able to fully address the volume of late applications that we are currently receiving.

It is important to remind each member of the industry that on July 1 an individual may not act as a Mortgage Loan Originator unless he/she is licensed or has received official written e-mail communication from DFI outlining the conditions under which that individual can work…”

It’s unfortunate for consumers that Congress made two separate classes of mortgage originators: Licensed and Registered.   You can follow the dollars to figure out how that happened.    In my opinion, all mortgage originators should be held to the same standards.   Consumers should not have to determine whether a mortgage originator is licensed or not and what licensing means verses a simply registered mortgage originator working for a bank mortgage company or credit union.  With that said,  I’m thankful to be in the licensed category since those LO’s who are licensed are held to a higher standard than a registered loan originator per the SAFE Act.  

Tomorrow, many mortgage originators employed at consumer loan companies/correspondent lenders or mortgage brokers who did not jump through the licensing hoops quick enough will either need to cease taking applications or go work for a bank or credit union.  Again, this is for residential mortgage applications on properties located in Washington State (this applies to mortgage originators not in the State of Washington but taking applications on residential property located in Washington).   

You can verify if your mortgage originator is licensed by checking http://www.nmlsconsumeraccess.org .   You can run a search by entering their first and last name along with the state abbreviation.   If your mortgage originator works for a bank or credit union, they’re not required to be licensed and registration is not available for them yet.

This entry was posted in Federal Law, Industry, Industry Talk, Mortgage/Lending by Rhonda Porter. Bookmark the permalink.

About Rhonda Porter

Rhonda Porter is an NMLS Licensed Mortgage Originator MLO121324 for homes located in Washington state. Her blog, The Mortgage Porter, is nationally recognized for sharing relevant information to consumers about mortgages. She has been originating mortgages since 2000 at Mortgage Master Service Corporation #40445 Consumer NMLS Website: http://www.nmlsconsumeraccess.org/TuringTestPage.aspx?ReturnUrl=/EntityDetails.aspx/COMPANY/40445 NMLS ID 40445. Equal Housing Opportunity. You can follow Rhonda on @mortgageporter, Facebook and/or Google+

10 thoughts on “If Your Loan Originator Isn’t Licensed Today, They Need to Work for a Bank or Credit Union Tomorrow

  1. The NMLS system has been running a bit slow these past few days. I had to try 4 times to upload my attendance list from last week’s loan originator class and finally got through yesterday.

    Please note! I have heard reports of MANY loan originators in Washington State who tried very hard to meet the deadline and made it. Some had to travel to Yakima or Tri-Cities because all the testing centers around here were full toward the end of June.

    With that said, I have also heard reports of many loan originators who did not meet the deadline here in WA State.

    Other states may have different deadlines.

  2. Jillayne, what can a mortgage originator who works for a CLA or broker (not a bank or credit union) do if they did not meet today’s deadline if they have a loan application they need to take for a new client?

    NOTE to consumers and RE pros–just because your mortgage originator uses the title “mortgage banker” doesn’t necessarily mean they work for a bank–they could be CLA/correspondent lenders.

  3. Hey, that was fun and interesting!

    Looks like they have it all right, except for needing an updated phone number.

    Rhonda…totally agree. ALL loan originators should have to have the same transparency. It has always been important to know who you are dealing with, and it more so today than ever.

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