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Saturday, November 13, 2010

SAFE Test and NMLS licensing: Consumer Benefits Outlined

As I have mentioned in a previous Blog post, I have successfully passed my SAFE Exam (July 2010) and am licensed within the NMLS system (NMLS #263702).

What I find interesting (and perplexing!) is that NOT all Mortgage Loan Originators (as we are now ALL called) are required to have an NMLS license, and take the National SAFE Exam.

Both regulatory systems were designed to protect the consumer. Some mortgage professionals are exempted from regulation and don't have to test and be licensed??????

This is definitely a time for the age old adage:  "Let the Buyer Beware!"

I am posting an excerpt from an article by Joffrey Long which underscores the importance of consumers working with Mortgage Loan Originators who are SAFE and NMLS compliant:

Still of concern, however, are the Act’s gaps.  Not all loan officers are required to complete pre-license training and to pass a comprehensive licensing exam, enabling the use of legislative loopholes.
Here’s how:
Loan officers who work for Federally chartered banks or credit unions DON’T have to take the exam or the pre-license training.  So unless your loan officer works for a certain type of company, you’re really no saferLawmakers decided to trust the banks to properly screen and train their originators.  Hmmm, do you trust the banks?
To find out if your loan professional is really qualified,  has undergone required training and passed the exam - a little due diligence may be necessary.
First, ask for their license number and what agency they’re licensed by.  If they work for a bank or Federally chartered credit union, they might tell you they don’t have to be licensed.  If they tell you what license they work under, you can check on that licensing authority’s website for their license history.
But be careful.  Whether you’re buying foreclosed homes, looking for home refinancing, or you’re a first time homebuyer, you need to speak with a real financing expert.  

About Joffrey Long
Joffrey Long provides mortgage lending and real estate advice and insight for homebuyers, real estate investors and investors in mortgage loans.  He’s a mortgage lender and real estate investor himself, and has been in the industry for 34 years.  He’s also called upon to testify as an expert witness in mortgage related litigation matters.