Most mortgage professionals are familiar with the new licensing requirements – the pre-licensing education, the exams that you need to pass, and the FBI criminal background checks. Coming soon, (around October, 2010), the Nationwide Mortgage Licensing System (NMLS) will open up to begin accepting the last requirement – the credit report. Under all states laws concerning the licensing of loan originators, you must authorize your state licensing agency to obtain a copy of your credit report. Your state regulator must determine that you have shown financial responsibility before they will approve your licensing application.
Many of you are wondering whether your credit report will be the stumbling block that prevents you from getting licensed under the new laws. After all, 2008 and 2009were terrible years for the industry and many of you took big hits in income those years. Many of you ran into credit card debt and had trouble paying your bills. Will this be an issue now?
A few states have already issued guidelines. If your state has not, you should pay attention to the guidelines already announced – it is likely that your state’s requirements will be similar. The following items will probably trigger a close review of your license application: bankruptcies (timeframes of how long ago your bankruptcy will matter will differ by state), tax liens, current outstanding judgments (some states will not hold judgments for medical expenses against you), a history of collection accounts, foreclosures, outstanding child support, or no credit history. Some states may have minimum credit scores, others may not.
Most licensing regulators are not stating that any of the above criteria are automatic disqualifiers, they are saying that they will review your entire credit history and any explanations you can provide as to why you had credit issues before they make their decision.
What can you do to help your application? Obviously, you cannot change what has already happened. But, if you have current credit problems, get them resolved now. Pay your judgments, get any tax liens released, and write down your explanations of any derogatory credit issues. However, if any of your credit problems stem from issues of dishonesty, fraud, misappropriation of trust funds, or misrepresentation, you may not be able to get approval for a license.
Contact Robin Gronsky at Rgronsky@Gronskylaw.com if you want to explore expanding into new states or you need help with your licensing applications (company or loan originator). I’ll keep what you tell me confidential but I cannot give you any specific legal advice until you become a client of the firm. This is done by written agreement only.
Monday, June 28, 2010
Tuesday, June 22, 2010
Florida to Temporarily Stop Taking Mortgage License Applications on July 8, 2010
On October 1, 2010, Florida joins the rest of the nation in transitioning to the Nationwide Mortgage Licensing System (NMLS). To prepare for the transition, the Office of Financial Regulation will stop accepting new applications for mortgage lenders, mortgage brokers, correspondent mortgage lenders, and mortgage broker businesses on July 8, 2010.
If you want to originate in Florida, you must submit your application now. If you don't submit your application by July 8, 2010, you will have to wait until Florida opens up to the NMLS on October 1, 2010. All existing licensees will be transitioning their current licenses and essentially reapplying because they will be subject to the new rules under the SAFE Act. And your new application (which will be required to be submitted through the NMLS) will get caught up in the crush of existing licensees who are transitioning. The current wait time of approximately 122 days will balloon after October 1, 2010.
If you want to originate in Florida, you must submit your application now. If you don't submit your application by July 8, 2010, you will have to wait until Florida opens up to the NMLS on October 1, 2010. All existing licensees will be transitioning their current licenses and essentially reapplying because they will be subject to the new rules under the SAFE Act. And your new application (which will be required to be submitted through the NMLS) will get caught up in the crush of existing licensees who are transitioning. The current wait time of approximately 122 days will balloon after October 1, 2010.
Tuesday, June 15, 2010
Where the Rich People Are Moving and Why You Should Care
A recent article in Forbes magazine analyzed IRS data to find where the rich people are moving. The analysis is by county and the number one county was Collier County, Florida, where Naples is situated. The second place county was Greene County, Georgia, between Atlanta and Augusta.
What can you do with data like this? If you are deciding where to relocate to start up your mortgage origination business, you want to pick a place where there are plenty of people who can afford to buy houses. You also want buyers who have more expensive houses, because those houses have larger mortgages. The same thought process should be used if you are not relocating but looking to expand your business. Which states are the most lucrative? Which states have the cheapest level of entry? If the state you are considering does not require a brick-and-mortar presence, that will save you a ton of money in start-up costs. Can you meet the other licensing requirements – number of years in the industry, surety bonds, passing another exam?
If you are not moving to your new states, how will you get new business? Networking, of course. Do you know anyone in those states who can introduce you to real estate agents, builders, accountants, and other referral sources? Can you use LinkedIn or Plaxo to find referral sources? How much would traditional advertising cost you? Can you form a strategic alliance with other mortgage professionals and community banks in the new states in which you want to do business?
If you have never thought about originating mortgages outside of your home state, this may be a good time to start investigating your options. The mortgage world is changing and you must change with it or it will leave you behind.
Contact Robin Gronsky at Rgronsky@Gronskylaw.com if you want to explore expanding into new states. I’ll keep what you tell me confidential but I cannot give you any specific legal advice until you become a client of the firm. This is done by written agreement only.
What can you do with data like this? If you are deciding where to relocate to start up your mortgage origination business, you want to pick a place where there are plenty of people who can afford to buy houses. You also want buyers who have more expensive houses, because those houses have larger mortgages. The same thought process should be used if you are not relocating but looking to expand your business. Which states are the most lucrative? Which states have the cheapest level of entry? If the state you are considering does not require a brick-and-mortar presence, that will save you a ton of money in start-up costs. Can you meet the other licensing requirements – number of years in the industry, surety bonds, passing another exam?
If you are not moving to your new states, how will you get new business? Networking, of course. Do you know anyone in those states who can introduce you to real estate agents, builders, accountants, and other referral sources? Can you use LinkedIn or Plaxo to find referral sources? How much would traditional advertising cost you? Can you form a strategic alliance with other mortgage professionals and community banks in the new states in which you want to do business?
If you have never thought about originating mortgages outside of your home state, this may be a good time to start investigating your options. The mortgage world is changing and you must change with it or it will leave you behind.
Contact Robin Gronsky at Rgronsky@Gronskylaw.com if you want to explore expanding into new states. I’ll keep what you tell me confidential but I cannot give you any specific legal advice until you become a client of the firm. This is done by written agreement only.
Monday, June 7, 2010
The SAFE Act Requirements Are Only the Minimum
In 2008, Congress passed the SAFE Act, which had the objectives of creating a uniform set of license application and reporting requirements for loan originators, enhancing consumer protections, creating a nationwide database, and providing tracking ability of loan originators. The SAFE Act set out minimum requirements of which most mortgage industry members are familiar:
20 hours of pre-licensing education, 8 hours of continuing education after the first year of licensing, pass a national and a state test, FBI background criminal check, and (starting in October, 2010) provide credit reports.
These are the minimum requirements but the SAFE Act gave each state the right to set additional requirements. And some states have. Many states have additional forms that must be signed by the loan originator as part of the application process. Other states require state background checks so you are getting your fingerprints taken twice (sometimes at 2 different places) so that one set of fingerprint cards can be sent to your state’s criminal database and the other set can be sent to the FBI database. Some states accept the 20 hours of pre-licensing education as full compliance with their licensing requirements and other states require the 20 hours plus some extra hours of state-specific education (for example, North Carolina and New Jersey require 4 extra hours). Some states are requiring 8 hours of continuing education but other states require additional hours (for example, Kentucky requires 12 hours).
Especially if you are licensed in multiple states, you must be aware of the licensing requirements of each state in which you wish to be licensed. Some states require more than you thought they would.
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!
20 hours of pre-licensing education, 8 hours of continuing education after the first year of licensing, pass a national and a state test, FBI background criminal check, and (starting in October, 2010) provide credit reports.
These are the minimum requirements but the SAFE Act gave each state the right to set additional requirements. And some states have. Many states have additional forms that must be signed by the loan originator as part of the application process. Other states require state background checks so you are getting your fingerprints taken twice (sometimes at 2 different places) so that one set of fingerprint cards can be sent to your state’s criminal database and the other set can be sent to the FBI database. Some states accept the 20 hours of pre-licensing education as full compliance with their licensing requirements and other states require the 20 hours plus some extra hours of state-specific education (for example, North Carolina and New Jersey require 4 extra hours). Some states are requiring 8 hours of continuing education but other states require additional hours (for example, Kentucky requires 12 hours).
Especially if you are licensed in multiple states, you must be aware of the licensing requirements of each state in which you wish to be licensed. Some states require more than you thought they would.
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, June 1, 2010
New States Start Loan Originator Testing
One of the requirements for getting licensed as a loan originator is passing both a national test and a state test. The national test has been available for over a year. Most of the states have had their tests go live since they first joined the Nationwide Mortgage Licensing System (NMLS). The newest states to open up their state tests are: Alabama, Delaware, Missouri, Montana, Oregon, South Carolina and West Virginia. You can register through the NMLS for these tests now and start taking the test on June 14, 2010.
You should also remember that some states are certifying prior test results if part of their licensing requirements included passing a state test. Before you sign up for a state test, find out whether you can certify that you passed that state’s test so you do not have to take a test again.
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!
You should also remember that some states are certifying prior test results if part of their licensing requirements included passing a state test. Before you sign up for a state test, find out whether you can certify that you passed that state’s test so you do not have to take a test again.
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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