Does your Loan Officers Credit Score Matter to You?

Mortgage and Lending with Cambria Mortgage NMLS 274132

Does your Loan Officers Credit Score Matter to You?
Nationwide Mortgage Licensing System now Checking S.A.F.E Act Loan Officers Credit Reports

St Paul, MN: In reaction to the mortgage market meltdown that exploded onto the market in early 2007, Congress went after what they believed to be a major contributor to the problem, the lack of licensing and standards for Loan Officers.

The result was the S.A.F.E. Act of 2008, which requires pre-employment education, passing a difficult Federal test, passing difficult State tests for each state the Loan Officer is conducting business, yearly continuing education, criminal background checks, and as of Nov 1, 2010, a review of the Loan Officers personal credit report.

While just about everyone would agree that this was a move in the right direction, Congress seriously dropped the ball. The S.A.F.E. Act, only requires non-bank Mortgage Loan Officers and Loan Officers working for Mortgage Brokers to meet the requirements. Loan Officers at big banks, Wells Fargo, US Bank, Chase, Bank of America, and any other Federally Charters Bank ARE NOT REQUIRED to do anything except register their name in the system. This has created a huge gap in knowledge, experience, and Loan Officer quality.

Part of the S.A.F.E Act required a public access web site where consumers can look up their Loan Officer. Follow this link: to check out your favorite loan officer.

CREDIT REPORTS are now required as to be submitted into the Nationwide System for State Review. State Regulators will review each non-bank Loan Officers credit report to determine how responsible the Loan Officer is with their personal credit. One can only assume this is under the misguided thought that if the Loan Officer isn't able to handle their own credit, how can they advise you on yours? On the surface, this doesn't sound like a bad requirement, but there are many reasons that good people can end up having bad credit through no fault of their own. Major medical issues, spouse job loss, etc. The exact same factors that could turn YOUR personal good credit bad.

Items under review will include: Bankruptcies, judgments (except medical), tax liens (both state and federal), foreclosures (past three years), general late payments on accounts, collection accounts, outstanding child support, and more. According to the rules, they will not be looking at the actual credit score, but systematically looking at the Loan Officers overall long term financial irresponsibility before they make a final decision on granting a license.

I personally have excellent credit, and have no fear over my credit report, but let's assume a Loan Officer DOES have credit issues? No problem. Just go work for a bank and problem solved. No credit report required.


Be Smart - Get Answers

Joe Metzler is a Certified Minnesota Mortgage Specialist (MMS). His team has over 50-years mortgage lending experience in MN and WI. View his web site at Joe's NMLS  # is 274132

Joe Metzler, MMS - (651) 552-3681
33 Wentworth Ave E #290, Saint Paul, MN 55118
Ph: (651) 552-3681
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(C) Copyright 2010 - Joe Metzler. Re-Blog but don't steal.


Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Joe Metzler 06/28/2011 02:14 AM
Lending / Financial
All About Mortgages/Mortgage Networking
The FHA Mortgage Group
Minnesota Real Estate
credit reports loan officers safe act safe nmls

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Tom Tousignant
Fairway Independent Mortgage NMLS id #2289 - Charlotte, NC
CMPS, NMLS id#56471

Joe, great information - there is a HUGE gap in credibility developing since retail bank loan officers have no licensing, testing, or background checks.  Imagine if only half of the Real Estate Agents had licenses or Continuing Education requirements?

Nov 09, 2010 01:29 AM #1
Tni LeBlanc, RealtorĀ®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Hmmm a little.  As an attorney there are states that would make me list every credit account I've had in the past 10 years in order to sit for the bar.  I think it is a legitimate field of inquiry.  I wish the education required of lenders was more extensive as well.

Nov 09, 2010 01:33 AM #2
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

I wonder who lobbied for a higher standard for non-bank loan originators.  Who will gain with fewer loan brokers and fewer options for consumers?  Couldn't possibly be the big banks, could it?


Nov 09, 2010 01:49 AM #3
Larry Kantner
Wells Fargo Home Mortgage - Newtown, PA

Joe, thanks for this post. Although reading it does make the anger bubble up inside of me.

It's absolutely irresponsible to not require mortgage originators from banking institutions to take the same testing in order to gain an originator's license. I agree with Mike about who is the force behind the lobby to raise the standard for non-bank loan officers. It's glaring to most of us who are required to pass the tests, and now the credit report "test" too.

I am all for raising the standards of mortgage loan originators, but it should be required of ALL originators, no matter where they hang their hat.  

Nov 19, 2010 07:11 AM #4

I think it is absolutley ridicolous. I have bad credit now due to the meltdown. I did loan originating for 13 yrs with no problems and no fraud. I truely cared about my clients and what type of loan they recieved. Its funny that all of the blame was placed on the lo and brokers. Especially when I would beg my clients to read up on stuff and understand, and they refused. If I advised on a loan that I felt was not good , but they qualifed for ( stated loan, Interest only, etc) I would try to advise them of diffrent route and many told me that they would just go to the next loan officer shop to get loan??? .... My credit issues is other circumstanced as well that have happened in my family , but I am working on rebuilding. But I take it from researching I am SOL for getting my license back. Sad because I enjoyed the job!

Nov 30, 2010 05:40 PM #7
Ken and Leslye Huebsch
3x Individual Agent of the Year, Luxury Homes, First-Time Buyers, Residential Resales, New Construction - Harrisburg, PA
Realtors - Harrisburg Homes for Sale 717.514.1793

I always have to laugh when I think of a comment my Dad made to his cardiologist, when he was told he had to lose some weight. The cardiologist weighed about 300 lbs. You can figure how the conversation may have gone...  Same thing, right?!

Jun 28, 2011 02:18 AM #8
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