Good news for Realtors and Consumers in New Mexico

By
Mortgage and Lending with superior mortgage services, llc

Senate Bill 342 passed both houses and was signed by the govenor back in the spring of 2009.  It requires all state licensed loan originators to obtain a license by July 31st 2010.  Only federally charted depository employees, credit unions, and the Farm Credit Administration are exempt.

That day is fast approaching.

I think it is a good thing.  As one of only a few instructors approved to teach loan originators their required pre-licensing courses, I have seen many a loan originator recently that definitely needs the education.  I had one of my former students call me yesterday because she failed both the federal and state exams.  Now, that may look bad upon me as an instructor, until you hear that everyone passed all my classes with at least a 75%.  That's all you have to get on the federal & state exams, also.

Anyway, this poor loan originator has been working in the industry for 5 years and he doesn't even know how to pre-qualify somebody with a calculator.  His comment to me after I discovered this was "the computer does it for you."  Well, I gotta tell ya, After 22 years, I can pre-qualify somebody on my cell phone while driving, eating, and listening to the radio.  This kind of loan officer is just the kind that this law was meant to weed out.  Nothing personal.  I like him as a person.  He just shouldn't be advising consumers on the biggest purchase of their life.

Senate Bill 342 consists of 3 different laws in one.  Part A is the Home Loan Protection Act, which , among other things, makes negative amortization and stated income loans illegal.  Part B is the Mortgage Loan Company Act, which, among other things, sets the minimum amount of surety bond a company must have based on their volume.  It also sets the minimum requirements for branch managers.  Part C is the Loan Officer Licensing Act. 

The Loan Originator Licensing Act establishes that Loan Originators must have good credit, no felony convictions in the last 7 years, never a felony conviction for fraud, pass an FBI background check with fingerprints, register with the National Mortgage Licensing System to obtain a Unique Identifier Number, and pass both a state and federal exam with at least a 75%.

The good news for consumers is that the loan officer who really worked full time as a car hop will not be in the business any more simply due to the fact that most originators (not companies) will have to shell out apprx $1500 apiece just for the education, unique identifier number, tests, (and pass them) and fingerprints.

The good news for those of us who do enough volume to stay in the business is that the level of professionalism in our industry will rise.

The good news for Realtors is that you can probably bet that if your borrowers don't go with your preferred lender, the other loan officer probably knows what they are doing. :)

Comments (1)

Rich Cederberg
eXp Realty - Albuquerque, NM
eXp Realty Agent Albuquerque

"Well, I gotta tell ya, After 22 years, I can pre-qualify somebody on my cell phone while driving, eating, and listening to the radio."

Yes, he really can, and he never misses!

 

May 25, 2010 04:59 PM