Loan Originator, Mortgage Broker, and Consumer Loan License Numbers for Jan 2011

If anyone is curious to see the number of licensed loan originators, mortgage brokers, and consumer loan companies now that we’re finished with the licensing process for 2010 (LOs all have a deadline of 12/31 every year) Washington State DFI provides these numbers for us in a downloadable excel file here. As of Jan 20, 2011 here’s how the numbers look:

WA State Licensed Loan Originators: 5,661.
This number includes loan originators who work for a mortgage broker. This group of LOs has been licensed since 2007 and their numbers dropped dramatically following the meltdown from a high of around 14,000 in 2008.  The 5661 total also includes loan originators who work for a consumer loan company. 2010 was the first year they were required to be licensed. Consumer loan lenders sometimes refer to themselves as “mortgage bankers” or “correspondent lenders.” Consumer loan companies sometimes have a mortgage banking division but these firms are very different from a traditional retail bank in that they do not offer checking and savings. I like to refer to them as “non-depository lenders.”  Consumer loan companies have the ability to fund their own loans through various lines of credit and that’s why our state requires these companies to be licensed under the Consumer Loan Act. Mortgage Brokers are licensed under our state’s Mortgage Broker Practices Act.

Mortgage Broker main and branch offices: 498

Consumer Loan Company main and branch offices: 1566

Loan originators who work under a mortgage broker or consumer loan company are called “mortgage loan originators.”  LOs who work at a retail depository bank will be referred to as “registered loan originators” as they do not have to pass a national or state competency test or take the required pre-licensing or continuing education mandated under the federal SAFE Mortgage Licensing Act. Bank loan originators begin their registration process this year.  In WA State, mortgage broker and non-depository lender LOs must hold an active LO license in order to originate; there are no exceptions, not even for just one loan.

There are plenty of loan originators who were not able to pass the national loan originator exam for various reasons and LOs who will not be able to hold an LO license (see page 2 of this pdf.)  Real estate brokers and consumers ought consider performing a due diligence check on the licensing status of their loan originators through the Nationwide Mortgage Licensing System. Why? Well many local Realtors know their favorite, local loan originator. However, sometimes consumers select a loan originator by what company is offering the lowest rates or lowest fees, which is the absolute worst way to select a loan originator but it happens typically when a consumer chooses a lender via a deceptive banner ad off a website and ends up at Lending Tree or Quicken or some other out of state lender (by the way I get more phone calls and emails from consumers who had a horrible experience at those two web lenders than anywhere else.) If a loan originator is located out of state and the company is a mortgage broker or non-depository lender, he/she still must hold a WA State LO license if conducting business in this state.

We have LOs who are located all over the U.S. that HAVE been properly licensed. Did you know there are 497 LO’s licensed in WA state located in California?  Did you know that WA State has issued LO licenses to 149 people in Florida, also known as the mortgage fraud headquarters of the world, 280 in Michigan (whaaa?), 197 in Pennsylvania, and 102 in Texas. 

Out of the 5661 licensed LOs in WA State, only 2967 are located here.  The rest are out of state. Surely we’ll have some folks licensed in multiple states who are living in Idaho, Oregon, and Alaska. I was still amazed at how many are from other parts of the U.S. and why a consumer would select a person located out of state.  Maybe one of our RainCityGuide readers can enlighten us.

18 thoughts on “Loan Originator, Mortgage Broker, and Consumer Loan License Numbers for Jan 2011

  1. Ah, Jillayne, you always have the answer.

    Weird isn’t it, that nearly half of the licensed loan originators in WA state are not even from WA. The Oregon ones make sense, with the Portland/Vancouver metropolis, but what is with all of the Michigan LOs?

    Is there a way to break down LO’s by Mortgage Broker offices vs CLAs?

    There seems to be way less Mortgage Broker offices, and my impression is that they would also have fewer LO’s per office.

  2. This is a real eye opener. I would have never thought that more than half of the LOs licensed in Washington wouldn’t even be in the state. I also wouldn’t have assumed that Lending Tree or Quicken would have been among the worst. I would figure, as I assume many people would, that well-known, national, household name lenders such as these would be among the best. It really says a lot about just how careful you have to be when seeking an LO.

  3. Hi Roger,

    I don’t think mortgage broker main branch numbers will drop that much further. Instead I think we’ll see more of a fallout of loan originator numbers as people who work part time will not be able to make the kind of compensation to make “keeping your license” worth it after compensation limits go into effect in April.

  4. There was a mass exodus just from the lack of business. It used to be easy to make a decent living with very little effort on the part of the LO or Realtor.

    We saw a similar drop in numbers here in IL. I’m sure the Realtor numbers reflect the same trend. The top 20% of individual LOs have more business than ever though. It was a blockbuster year for LOs here in IL. If you were in the business awhile and had a decent referral base and actually knew how to get loans closed (all the u/w changes, etc), the phone was ringing off the hook.

    New rules and regulations will push the remaining ones out who are left on the fence.

  5. I had no idea that there were so many out of state LO’s licensed for biz here in WA… makes me feel like I’m in an even smaller pool (licensed mortgage originator).

    Why do consumers work with an out of state LO? I’m guessing they chased a rate, much like some of the ads here a RCG. They trust it and want to believe that it’s true. Why shouldn’t a consumer trust a goofy low rate that’s published here? “It must be good if it’s on Rain City Guide… why Jillayne, Rhonda and Ardell would never tolerate having something not true posted here…” [NOTE: my fellow RCG contributors know I’m not happy w/some of the ads that appear on this site…I don’t blame anyone for monitizing a blog, but I’m not into promoting misleading advertising…rant over…]

    When I have to compete against a liar rate on the internet or radio, consumers can’t believe that I don’t offer that same rate. Why don’t I have it–because odds are, it’s not real. It’s unfortunate that big companies are allowed to mis-advertise because it causes distrust with clients.

  6. Hi,

    As a Loan Originator I have been running into several Realtors that are quoting Interest rates on their adverstisements, how is it that Realtors are still allowed to publish Interest Rates and can give out closing cost worksheets that in no way come close to actual charges?

    Do you think the DFI will ever put a stop to Realtors advertising rates that don’t exsist?

  7. Rhonda and Kim:

    Illegal advertising of credit is rampant, and generally goes unpunished, though not always.

    It is truly sad that RCG has accepted such illegal advertising.

    Kim, realtors are subject to the same laws (TILA) that lenders are, however, the enforcement is delegated to different entities. WA DFI enforces lender’s compliance (CLA and brokers), and is fairly responsive to shutting down illegal ads, at least when it is brought to their attention. They can never seem to do anything about the internet ads, and have a hard time tracking down illegal mailings, but they jumped on radio ads in a big way a few years ago.

    Realtors are not under DFI’s jurisdiction, they fall under the AG’s office. In my experience, the AG’s office has little interest in enforcing TILA, as regards to illegal advertising.

    However, don’t let that discourage you from reporting it. You may be more persuasive.

  8. Jillayne, great post!

    Honestly, I look forward to the day when mortgage professionals are now longer just considered “emerging professionals,” but a full force professional body with consistent standards and a “board” of accountability.

    I know we will get there someday, I just hope it is before my children begin to look middle-aged!

    Rhonda is right, I don’t know the politics of RCG, but misleading ad’s on a blog site sure seem to take advantage of the “goodwill” build off the backs of other poeple’s hard work.

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