I am licensed by the California Department of Real Estate (00979517). Effective January 2011 I will also have an endorsement to that license called a Mortgage Loan Originator. This is under the SAFE Act (Secure and Fair Enforcement for Mortgage Licensing Act) which is part of the Housing and Economic Recovery Act of 2008.
The SAFE Act is designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators.
To qualify for the MLO I had to take two exams; a National exam and a State exam. Everyone who will be originating mortgage loans is required to take and pass the exams. There are also education requirements, a criminal background check, and we have to also authorize a credit report to be run by the Nationwide Mortgage Licensing System.
I am so glad that this is coming into place. I cannot tell you how many hundreds of people who came to me during the loan intense times showing me their 1% loan. When I explained to them that it was not a 1% loan and that the 1% was a teaser rate- they never believed me ! They preferred to believe the loan officer who sold them the loan. Now, chances are, that loan officer is out of business. The new law has strict guidelines regarding disclosures and loan packaging. The entire residential mortgage industry is now 'coloring inside the lines'!
With all the changes there are some laws in place that I complained about but they are not all that bad except they are confusing, slow down the loan process and are a little more expensive for the appraisal...But, balancing everything out - the industry is better today and consumers are more protected.
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