Requirements To Become A Licensed Mortgage Loan Originator

how to become a mortgage originator

George Souto Mortgage and Lending Middletown, CT (860) 573-1308 Contact Profile

Yesterday I wrote a blog about an event that we are holding at McCue Mortgage " First Loan Originator Career Pathways Hiring Event". to provide individuals who are interested in becoming a Loan Originator with the information that they will need to obtain their Mortgage Loan Originator's License. At this event we will also answer questions, and give advice on how to succeed as a Mortgage Loan Originator once they have obtained their Mortgage Loan Originator's Licens. In this blog I want to provide a breif overview of the Requirements To Become A Licensed Mortgage Loan Originator . Before I do that it is important to define what a Mortgage Loan Originator is:

A Mortgage Loan Originator is an individual who takes a residential mortgage loan application, and offers, or negotiates terms for a residential loan, and is compensated for gain. A residential Mortgage loan is secured by real property on a residential structure of 1-4 units.

NOTE: A residential structure with 5 or more units is considered a commercial property.

In order to obtain a Mortgage Loan Originator (MLO) License, an individual needs to meet all the requirements that are mandated by the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE). In 2010 SAFE put the responsibility of establishing the minimum standards, and rules for the licensing and registration of Mortgage Loan Originators on each State. So what are the requirements for becoming a Mortgage Loan Originator?

  • Register with the Nationwide Mortgage Licensing System (NMLS).
  • Successfully complete a National Test and State Test admin­istered through the NMLS, and pass both Tests with a minimum 75% Grade.
    • The National Test consist of 100 questions, and you are scored on 90 questions. 2 ½ Hour Time Limit.
    • The State Test consists of 60 questions, and you are scored on 50 questions. 1 ½ Hour Time Limit.
  • NOTE: Effective as of August 29, 2011, each time an applicant fails a test they must wait 30 days before they can re-take the test again. If an applicant fails the test 3 times, the applicant must wait six months (180 days) before re-taking the exam again.

    Besides taking the National and State Tests, and passing them with a grade of 75% or better. SAFE also requires each applicant to take a 20 hour Class consisting of the following:

    • 3 hours of Federal Law and Regulations.
    • 3 hours of Ethics, including fraud, consumer protection, and fair lending issues.
    • 2 hours of training related to lending standards for non-traditional mortgage products.
    • 12 hours of electives on mortgage origination

    NOTE: The 20 hours of pre-license education does not need to be completed prior to the taking the Nationwide Mortgage Licensing

    System (NMLS) Tests

    Mortgage Loan Originators are also required by SAFE to renew their Mortgage Loan Originator's License annually. As part of the that requirement Mortgage Loan Originators must complete 8 Hours of Continuing Education Classes annually consisting of the following:

    • 3 hours of Federal Law and Regulations.
    • 3 hours of Ethics, including fraud, consumer protection, and fair lending issues.
    • 2 hours of lending standards for non-traditional mortgage lending.
    • 1 hour of electives on mortgage origination.

    The SAFE Act further requires that each Mortgage Loan Originator (MLO) applicant submit to Fingerprinting, and a Background Check before an MLO License is issued by the National Mortgage Licensing System (NMLS). The fingerprinting is administered at designated NMLS locations through out each State.

    Under the SAFE Act if certain violations are reported, the MLO License maybe denied. The following are violations that would be cause for denying an MLO License:

    • The applicant has been convicted of a felony involving an act of fraud, dishonesty, breach of trust, money laundering, or convicted of any felony in the seven year period before filing an application for an MLO License.
    • The applicant has had an MLO License revoked in any Government Jurisdiction.
    • The applicant has demonstrated a lack of Financial Responsibility by mis-managing his or her own finances

    In determining the applicants Financial Responsibility, the applicant will be required to give permission to obtain their Credit Report to assist in the determining if the applicant has been financially responsible. The Credit Report is part of the NMLS determining if the applicant will operate honestly, fairly, and effectively as a Mortgage Loan Originator.

    The final requirement before a Mortgage Loan Originator's License is issued, is that the applicant needs to be sponsored by a Lender. However, it will be much easier to obtain a sponsorship from a Lender if all of the above requirements have been already fulfilled.

    Being a Loan Originator has been a very rewarding, and satisfying experience for me, and I would highly recommend a career as a Mortgage Loan Originator. The outline above should provide a good understanding of the Requirements To Become A Licensed Mortgage Loan Originator. I would be happy to provide any other additional information to anyone who is looking to become a Mortgage Loan Originator, and to assist in anyway I can.

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    Info about the author:

    George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto @mccuemortgage.com

    By George Souto Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages Connecticut NMLS #65149

    Posted on March 03, 2013 12:30 AM

    Source: activerain.trulia.com

    Category: Credit

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