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.