The Virginia Bureau of Financial Institutions recently put out a news release reminding its loan originators that they must complete their transition to the Nationwide Mortgage Licensing System (NMLS) before July 1, 2010. Evidently, many loan originators are taking the first steps to get their record onto the NMLS but they don’t complete the process. When you don’t complete the process, you cannot get an approval to work as a loan originator. This fact is true for loan originators in every state that is conducting licensing through the NMLS.
What does completing the process mean? As a company or a loan originator, you need to start by creating an MU1 (for the company) or an MU4 (for the loan originator) form. Many people think that once they have completed that step they are finished. Not even close. After paying your transition or new license fees, all mortgage lenders, brokers, and loan originators need to check to see whether they need to submit the jurisdictional checklist to the licensing agency. Who needs to submit the checklist? If you answered “yes” to any disclosure question, if your state requires additional forms or a surety bond, if your state requires a state background check, you may need to submit the checklist. The checklist may require you to submit additional documentation that you can access only through the checklist.
Many loan originators are neglecting to check back to the work list that is posted in your record on the NMLS to see if the licensing agency has posted deficiencies that must be corrected before your license is fully transitioned or approved. The deficiencies are usually items that you would have submitted if you had sent in the checklist, but can also include deficiencies because you did not take the national or state exam yet (and the deadline may be coming soon), you have not submitted your FBI criminal background check or a state background check or maybe a required surety bond.
Don’t forget to add in extra time that your state licensing agency will need to investigate your background. Just because you already are licensed does not mean that the state will not review your MU1 or MU4 record, now that the licensing standards have changed.
Remember that your licensing agency can assess fines and penalties if your license is not fully approved by the deadline. Don’t wait for the last minute. What will you do if you need to re-take one of the required tests and you have less than 30 days until the transition deadline?
Please feel free to forward this blog post to your colleagues, listserv members or favorite bloggers. Or if you would like to run it (in whole or in part) in any publication or quote from it, simply include my name and URL: http://www.mortgagelicensesolutions.com. No prior permission needed. To inquire about joining my list to receive my blog posts or my availability to speak to your group or write an article for your publication, please email me at Robin@Mortgagelicensesolutions.com. Thank you!
Monday, April 26, 2010
Tuesday, April 20, 2010
Managing Multiple Licenses
The transition to the Nationwide Mortgage Licensing System (NMLS) has many mortgage banker and broker companies who hold licenses in more than one state frustrated over the need to keep track of many new license requirements with different deadlines. Many owners had grown used to the different licensing requirements that the different banking departments used to require but now the rules have all changed.
The SAFE Act was the catalyst to get the state legislators to look at their licensing statutes and tweaking their existing requirements on top of adding the requirements necessitated by the SAFE Act. Some of the states did change their requirements, adding new categories of licensees, eliminating categories of licensees, or changing the qualifications. Even if you had completed some of the requirements, you had to again get your fingerprints taken, provide credit reports, and obtain larger surety bonds. In addition, you now had to license all of your loan officers (not previously required in every state). Each state set its own deadline for when all licensing conditions needed to be completed.
How do you ensure that not only you, but all of your loan officers are in compliance with all licensing requirements? If you run a small company or branch office, you may be the one person who wears all the hats other than originating loans. Therefore, you may be the one who must keep track of all of the requirements, all of the loan officers, and all of the deadlines. Or perhaps you have an administrative assistant who can juggle this task along with her other job responsibilities. It is probably better if one person coordinates for your entire office. You don’t want each loan officer to wing it on his own. You should have that one person in charge of this task create a spreadsheet of loan originators, states in which they must be licensed, requirements of licensing, dates by which each requirement must be completed and dates by which each requirement is completed. The spreadsheet should be reviewed maybe once a week to ensure that action is being taken on a timely basis. None of the loan officers should be allowed to wait until the last minute to complete their requirements as this can leave you with half of your staff taking the 20 hours of pre-licensing education when you need them to help clear stipulations. This once a week review must be mandatory, otherwise you will find that you are getting to it whenever you can get around to it. And that, of course, means that it will be left to the last minute.
If you do not have time to do it yourself and there is no one in your office who can do it, outsource this job. Let an outside company do the tracking of the requirements and the deadlines. You won’t have to spend the time on this detail-oriented task so you can concentrate on the activities that make you money.
Please feel free to forward this blog post to your colleagues, listserv members or favorite bloggers. Or if you would like to run it (in whole or in part) in any publication or quote from it, simply include my name and URL: http://www.mortgagelicensesolutions.com. No prior permission needed. To inquire about joining my list to receive my blog posts or my availability to speak to your group or write an article for your publication, please email me at Robin@Mortgagelicensesolutions.com. Thank you!
The SAFE Act was the catalyst to get the state legislators to look at their licensing statutes and tweaking their existing requirements on top of adding the requirements necessitated by the SAFE Act. Some of the states did change their requirements, adding new categories of licensees, eliminating categories of licensees, or changing the qualifications. Even if you had completed some of the requirements, you had to again get your fingerprints taken, provide credit reports, and obtain larger surety bonds. In addition, you now had to license all of your loan officers (not previously required in every state). Each state set its own deadline for when all licensing conditions needed to be completed.
How do you ensure that not only you, but all of your loan officers are in compliance with all licensing requirements? If you run a small company or branch office, you may be the one person who wears all the hats other than originating loans. Therefore, you may be the one who must keep track of all of the requirements, all of the loan officers, and all of the deadlines. Or perhaps you have an administrative assistant who can juggle this task along with her other job responsibilities. It is probably better if one person coordinates for your entire office. You don’t want each loan officer to wing it on his own. You should have that one person in charge of this task create a spreadsheet of loan originators, states in which they must be licensed, requirements of licensing, dates by which each requirement must be completed and dates by which each requirement is completed. The spreadsheet should be reviewed maybe once a week to ensure that action is being taken on a timely basis. None of the loan officers should be allowed to wait until the last minute to complete their requirements as this can leave you with half of your staff taking the 20 hours of pre-licensing education when you need them to help clear stipulations. This once a week review must be mandatory, otherwise you will find that you are getting to it whenever you can get around to it. And that, of course, means that it will be left to the last minute.
If you do not have time to do it yourself and there is no one in your office who can do it, outsource this job. Let an outside company do the tracking of the requirements and the deadlines. You won’t have to spend the time on this detail-oriented task so you can concentrate on the activities that make you money.
Please feel free to forward this blog post to your colleagues, listserv members or favorite bloggers. Or if you would like to run it (in whole or in part) in any publication or quote from it, simply include my name and URL: http://www.mortgagelicensesolutions.com. No prior permission needed. To inquire about joining my list to receive my blog posts or my availability to speak to your group or write an article for your publication, please email me at Robin@Mortgagelicensesolutions.com. Thank you!
Tuesday, April 13, 2010
Should Your Mortgage Broker Company Stick It Out or Find A Different Opportunity?
I read an article in a Buffalo newspaper that quoted a spokesman from the New York Banking Department who revealed that 315 mortgage brokers gave up their licenses last year. The number of licensed mortgage broker companies and loan originators is down in every state. There are a number of reasons for this situation. I’m sure you’ve experienced many of them.
The requirements of the SAFE Act have caused many loan originators who cannot meet its qualifications. There were loan originators who had criminal pasts, bankruptcies, bad credit, or no knowledge of federal and state laws who were working as loan originators. Many of these people have left or will be leaving the business as all of the loan originator licensing requirements become effective (no later than December 31, 2010). There are many loan originators who don’t deserve to be in the mortgage business, with their backgrounds, but I have spoken to many, who may not be able to stay in the business because of stupid decisions made when they were young or bad luck with their finances.
Others in the industry have spoken to me about their frustration with the requirements that the lenders are placing on them. Many lenders only wish to take applications from the highest volume brokers. But, volume is down all over the country. Most consumers are too nervous about their job situation to go out and buy a new house. Other consumers want to buy but cannot sell their existing home. Many brokers cannot bring the kinds of volume that the lenders insist on.
The new regulations are also causing mortgage companies to close up shop. Licenses cost more, surety bond requirements have gone up so the premiums cost more and the annual assessments have gone up as the need for banking department income is spread among a smaller number of licensees.
So, do you close up your business and work for a lender? Become a net branch? Leave the business? If you became a mortgage broker to make a lot of money, then the opportunities of being a net branch or working for a branch may make sense to you. After all, loan officers working for banks don’t need to be licensed as mortgage brokers or loan originators. You make the money without the headaches. Or you affiliate with another mortgage broker or lender and you are one of their branches. They worry about surety bonds and license fees. You just bring them loan applications and they pay you for them. There are many ways to stay in the business without necessarily maintaining your own mortgage broker business. There are companies out there that are looking for good brokers. You may want to explore every possibility out there and make a change to your employment situation.
But, if you feel that you provide a valuable service to consumers and you want to retain your independence, you need to hang on and educate your past and future customers about why an independent mortgage broker is better for them than their going to a bank. Mortgage brokers have not done the job they need to do to convince consumers that they are worth the fee that they are charging. The comments that were posted after that article that I read largely charged mortgage brokers with allowing fraud (if they didn’t cause it themselves) and with putting borrowers into loans that made the most money for the broker, not the loans that made sense for the borrowers. Are you doing anything to counteract these types of opinions? Can you give a borrower any reason why they should use a mortgage broker rather than going to a lender or a bank?
Some of you will hang in there because this is what you have been doing for the last 10-15 years. You feel that you are helping people, you like being your own boss and you believe that the shakeout in the industry will leave the strongest surviving and that will include you. If that is your reason for staying in business, go out and make your customers want your services. Show them how you help them when they are dealing with one of the biggest financial transactions of their lives.
Please feel free to forward this blog post to your colleagues, listserv members or favorite bloggers. Or if you would like to run it (in whole or in part) in any publication or quote from it, simply include my name and URL: http://www.mortgagelicensesolutions.com. No prior permission needed. To inquire about joining my list to receive my blog posts or my availability to speak to your group or write an article for your publication, please email me at Robin@Mortgagelicensesolutions.com. Thank you!
The requirements of the SAFE Act have caused many loan originators who cannot meet its qualifications. There were loan originators who had criminal pasts, bankruptcies, bad credit, or no knowledge of federal and state laws who were working as loan originators. Many of these people have left or will be leaving the business as all of the loan originator licensing requirements become effective (no later than December 31, 2010). There are many loan originators who don’t deserve to be in the mortgage business, with their backgrounds, but I have spoken to many, who may not be able to stay in the business because of stupid decisions made when they were young or bad luck with their finances.
Others in the industry have spoken to me about their frustration with the requirements that the lenders are placing on them. Many lenders only wish to take applications from the highest volume brokers. But, volume is down all over the country. Most consumers are too nervous about their job situation to go out and buy a new house. Other consumers want to buy but cannot sell their existing home. Many brokers cannot bring the kinds of volume that the lenders insist on.
The new regulations are also causing mortgage companies to close up shop. Licenses cost more, surety bond requirements have gone up so the premiums cost more and the annual assessments have gone up as the need for banking department income is spread among a smaller number of licensees.
So, do you close up your business and work for a lender? Become a net branch? Leave the business? If you became a mortgage broker to make a lot of money, then the opportunities of being a net branch or working for a branch may make sense to you. After all, loan officers working for banks don’t need to be licensed as mortgage brokers or loan originators. You make the money without the headaches. Or you affiliate with another mortgage broker or lender and you are one of their branches. They worry about surety bonds and license fees. You just bring them loan applications and they pay you for them. There are many ways to stay in the business without necessarily maintaining your own mortgage broker business. There are companies out there that are looking for good brokers. You may want to explore every possibility out there and make a change to your employment situation.
But, if you feel that you provide a valuable service to consumers and you want to retain your independence, you need to hang on and educate your past and future customers about why an independent mortgage broker is better for them than their going to a bank. Mortgage brokers have not done the job they need to do to convince consumers that they are worth the fee that they are charging. The comments that were posted after that article that I read largely charged mortgage brokers with allowing fraud (if they didn’t cause it themselves) and with putting borrowers into loans that made the most money for the broker, not the loans that made sense for the borrowers. Are you doing anything to counteract these types of opinions? Can you give a borrower any reason why they should use a mortgage broker rather than going to a lender or a bank?
Some of you will hang in there because this is what you have been doing for the last 10-15 years. You feel that you are helping people, you like being your own boss and you believe that the shakeout in the industry will leave the strongest surviving and that will include you. If that is your reason for staying in business, go out and make your customers want your services. Show them how you help them when they are dealing with one of the biggest financial transactions of their lives.
Please feel free to forward this blog post to your colleagues, listserv members or favorite bloggers. Or if you would like to run it (in whole or in part) in any publication or quote from it, simply include my name and URL: http://www.mortgagelicensesolutions.com. No prior permission needed. To inquire about joining my list to receive my blog posts or my availability to speak to your group or write an article for your publication, please email me at Robin@Mortgagelicensesolutions.com. Thank you!
Monday, April 5, 2010
Why You Need a Team of Trusted Advisors to Grow Your Business
Most entrepreneurs start their new businesses with the dream of building a successful business. Many of you who started your new business opened up your business when times were good and mortgage applications were rolling in the door. You weren’t prepared with a business plan, or market research, or entrepreneurial skills. Yet, because there was so much real estate activity going on, your business was thriving. Then everything changed and the phones got very quiet. Most of the mortgage bankers and brokers who couldn’t survive closed their doors. Loan officers left in droves. If you are one of the companies still left standing, you have much less competition than you did five years ago. But, the phones are still not ringing off the hook and you need to be smart to stay alive. If you create a team of advisors, you should be able to find professionals and businesspeople who can help you build a prosperous business.
Who should be on your team? You should have a business lawyer, an accountant who can advise you on taxes and on how to grow your profits, an insurance broker, and a person who has already created a successful business.
Why do you need these advisors and how do you find them? A business lawyer has the knowledge to advise you about how to avoid lawsuits (which are always more expensive than the costs of acting proactively). You want to consult with a business lawyer to help you negotiate with the landlord to get you the best lease terms. A business lawyer will draft your contracts for you to work with vendors, and with independent contractors (so you don’t get into trouble with the IRS or the labor department). You may have a logo to trademark. You may want a non-disclosure agreement so that your loan officers do not take your client lists or creative marketing ideas when they jump ship or you terminate their employment. Your business lawyer will help you with all of these problems or can refer you to another lawyer who has more expertise with these types of law.
Your accountant will help you set up a chart of accounts, prepare your business tax returns and advise you (together with your lawyer) on issues where taxes are involved. Your accountant should also be able to advise you on how to maximize business deductions so that you pay the least amount of taxes that are required.
An accountant or profitability consultant will advise you on how to grow your revenues, help you to focus on your core business and then add new products or services, advise you on setting your pricing strategy, and help you with cash flow problems.
Many businesses carry a wide variety of insurance – or should. These range from liability insurance to business interruption insurance to errors and omissions insurance to surety bonds to auto insurance to commercial property insurance. Do you have an independent insurance broker who will shop your business to several insurance companies? Who will find you the best coverages for the right prices? Who will advise you about risk management so you can keep your premiums as low as possible? That’s why you need an insurance broker on your trusted advisor team.
You should also try to find a business mentor, someone who has created a business that is successful. This person should be available, who will listen to you, who has the knowledge and skills that you want to acquire, and should be willing to give you constructive criticism and feedback. If you can find a mentor who has a successful mortgage company, that’s even better. But all businesses can borrow ideas from each other because certain issues exist in all types of businesses.
Your team of trusted advisors lets you look at your business through fresh eyes. It gives you a group of professionals who have been what you’re going through and have shepherded clients through your challenges. They have expertise that you do not have and should have contacts in other businesses that will help your business (such as technology, marketing, or pricing strategies). They will ask you questions that you haven’t even thought of yet. But, you must be willing to take the advice of your trusted advisors because they will help you build the business of your dreams.
How do you find these trusted advisors? Start with one advisor who you trust and ask them for referrals to the other types of advisors that you want to have. Interview them about their experience and ask yourself whether you would be willing to work with these individuals over an extended period of time. You must be comfortable with your team because they will know you and your business intimately. Only by being open and honest with your advisors can they really help you.
A good team will get you to your goals faster than if you do it on your own. Go find the help and support to get to your business goals faster.
Please feel free to forward this blog post to your colleagues, listserv members or favorite bloggers. Or if you would like to run it (in whole or in part) in any publication or quote from it, simply include my name and URL: http://www.mortgagelicensesolutions.com. No prior permission needed. To inquire about joining my list to receive my blog posts or my availability to speak to your group or write an article for your publication, please email me at Robin@Mortgagelicensesolutions.com. Thank you!
Who should be on your team? You should have a business lawyer, an accountant who can advise you on taxes and on how to grow your profits, an insurance broker, and a person who has already created a successful business.
Why do you need these advisors and how do you find them? A business lawyer has the knowledge to advise you about how to avoid lawsuits (which are always more expensive than the costs of acting proactively). You want to consult with a business lawyer to help you negotiate with the landlord to get you the best lease terms. A business lawyer will draft your contracts for you to work with vendors, and with independent contractors (so you don’t get into trouble with the IRS or the labor department). You may have a logo to trademark. You may want a non-disclosure agreement so that your loan officers do not take your client lists or creative marketing ideas when they jump ship or you terminate their employment. Your business lawyer will help you with all of these problems or can refer you to another lawyer who has more expertise with these types of law.
Your accountant will help you set up a chart of accounts, prepare your business tax returns and advise you (together with your lawyer) on issues where taxes are involved. Your accountant should also be able to advise you on how to maximize business deductions so that you pay the least amount of taxes that are required.
An accountant or profitability consultant will advise you on how to grow your revenues, help you to focus on your core business and then add new products or services, advise you on setting your pricing strategy, and help you with cash flow problems.
Many businesses carry a wide variety of insurance – or should. These range from liability insurance to business interruption insurance to errors and omissions insurance to surety bonds to auto insurance to commercial property insurance. Do you have an independent insurance broker who will shop your business to several insurance companies? Who will find you the best coverages for the right prices? Who will advise you about risk management so you can keep your premiums as low as possible? That’s why you need an insurance broker on your trusted advisor team.
You should also try to find a business mentor, someone who has created a business that is successful. This person should be available, who will listen to you, who has the knowledge and skills that you want to acquire, and should be willing to give you constructive criticism and feedback. If you can find a mentor who has a successful mortgage company, that’s even better. But all businesses can borrow ideas from each other because certain issues exist in all types of businesses.
Your team of trusted advisors lets you look at your business through fresh eyes. It gives you a group of professionals who have been what you’re going through and have shepherded clients through your challenges. They have expertise that you do not have and should have contacts in other businesses that will help your business (such as technology, marketing, or pricing strategies). They will ask you questions that you haven’t even thought of yet. But, you must be willing to take the advice of your trusted advisors because they will help you build the business of your dreams.
How do you find these trusted advisors? Start with one advisor who you trust and ask them for referrals to the other types of advisors that you want to have. Interview them about their experience and ask yourself whether you would be willing to work with these individuals over an extended period of time. You must be comfortable with your team because they will know you and your business intimately. Only by being open and honest with your advisors can they really help you.
A good team will get you to your goals faster than if you do it on your own. Go find the help and support to get to your business goals faster.
Please feel free to forward this blog post to your colleagues, listserv members or favorite bloggers. Or if you would like to run it (in whole or in part) in any publication or quote from it, simply include my name and URL: http://www.mortgagelicensesolutions.com. No prior permission needed. To inquire about joining my list to receive my blog posts or my availability to speak to your group or write an article for your publication, please email me at Robin@Mortgagelicensesolutions.com. Thank you!
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