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LOAN OFFICERS WORKING FOR BANKS DON'T HAVE TO BE LICENSED

Reblogger Steven Cook
Industry Observer with No Longer Processing Mortgages. MLO #293441 expired

Joe Petrowsky - makes some excellent comments regarding the difference between getting your mortgage funding from a bank or a licensed mortgage loan officer.  As he says, the biggest difference is "you don't get me."

Original content by Joe Petrowsky NMLS # 6869

“Loan Officers Working for Banks Don’t Have to be Licensed”

From time to time, I am asked what makes you different than getting a loan from a bank. I am always very comfortable answering the question. The first thing that I explain, if you go to a bank you don’t get me. That any loan officer that works for a bank doesn’t have to be licensed and I do. I explain the licensing process, which normally blows people away. That pretty much ends all questions about my me vs. a bank.

Loan officers working for banks don't have to be licensedA couple of years ago, a Realtor contacted me. He told me that someone I did a preapproval for, wants to purchase a home through his office, but he had never heard of me or my company. He told me that his office has an in house loan officer and she had apparently met with these clients and told them they can’t qualify for a mortgage.

I told the Realtor, that if I gave these buyers a preapproval I can get them a mortgage. That is, as long as nothing changed, as far as credit and income. He asked me to double check with the clients and contact him after the discussion. A couple of hours later, I called saying the clients are good to go.

A month later we closed the mortgage and I have been working with the Realtor ever since. He became a believer, in you don’t get me.

Roughly 130,000 LOs Working at Five Large Banks

By: Brian Collins

New figures compiled by the National Mortgage Licensing System show a wide difference between the operations of state-licensed mortgage companies and depository mortgage lenders.

State-licensed companies are generally small businesses and operate in local markets, according to Conference of State Bank Supervisors executive vice president Bill Matthews.

CSBS this week released a NMLS report showing that 83% of the 15,883 state-licensed mortgage companies operate in only one state and 72% of these firms employ one to five loan officers (originators).

Only 11 state-licensed lenders have more than 500 mortgage loan officers, according to the first-quarter NMLS report on state-licensed lenders.

Among the 10,575 federally insured depositories and their mortgage subsidiaries, 53 institutions have more than 500 LOs. And five of those federally insured institutions employ a total of 130,000 LOs, the Federal NMLS Quarterly Report says. (The bank numbers tend to be exaggerated because banks register non-LOs in the system, including processors and underwriters.)

Meanwhile, there are only 105,600 state-licensed LOs working for mortgage companies and brokerages in all 50 states.

“There is an incredibly high concentration of registered LOs working at a small number of banks,” Matthews told National Mortgage News.

Overall, there are 379,600 loan officers working for depository institutions.

In 2008, Congress passed the SAFE Act that requires bank and state-licensed LOs to register with the National Mortgage Licensing System & Registry. Matthews is president of a CSBS subsidiary called the State Regulatory Registry that maintains the registry’s website and issues the quarterly NMLS reports.

 image:nokhoog_buchachon/freedigitalphotos.net

 

Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x16

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Steven CookSteven T Cook
Loan Officer, MLO-293441      

Cascade Pacific Home Loans  NMLS ID 76988
720 S 333rd St  Federal Way  WA  98003
Office 253-874-1111 | Cell 253-677-1064
Toll Free 1-800-874-8760 | fax 253-295-3901
scook@cphloans.com | www.bayeq.com

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Comments(11)

Emily Medvec
eXp Realty LLC - Santa Fe, NM
Broker | Realtor | Serving Santa Fe & Northern NM

Steven, this is a great factual blog about the buyer options for where to get a mortgage loan and what the issues are for buyers to consider.

Jun 13, 2012 08:24 AM
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Emily -- Thank you for stopping by.  Although I cannot directly help your folks with their mortgages, I hope you have found a good licensed loan officer or two who provide you with the kind of customer service you and your clients deserve.

Jun 13, 2012 10:17 AM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Thank for the re-blog and the kind words. Keep up the great work on the west coast.

Jun 13, 2012 12:01 PM
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Joe -- thank you for very readable material to explain this distinction.

Jun 14, 2012 03:03 AM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Steven:  I missed this post by Joe ... so glad that you re-blogged.  Definitely worth doing, as it contains information that I don't believe most (whether in the public or other arms of our industry) grasp or know.  There is deep merit in having to have extensive education and being licensed.  Hopefully the playing field is leveled for all of us soon ...  because I believe we'll see some shake-up in the industry when it's finally implemented.  That is, if the big banks are still even in the mortgage business ...

Gene

Jun 22, 2012 11:19 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Steve, Loan Officers not being license is creating issues for me.  I am looking to hire more Loan Originator and the pickings are slim because so many of the Loan Originators went to go work for the banks because they either did not want to take the tests, or could not pas the tests.

The law definitely needs to be changed, and everyone should have to be licensed.

Jun 23, 2012 02:18 AM
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Gene -- it is starting to look like the big banks may get out of the retail mortgage business, especially if their people end up having to be licensed.  But even without that, some of their programs are becoming very uncompetitive - expecially with excessive turn times for doing file review/underwriting.

George -- yes, it would make things a lot easier for the general public, if everyone was working on the same tracks.  I can't even come up with a good analogy of another field where there are two different sets of criteria for doing the same job.

Jun 25, 2012 03:21 AM
Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

Haven't we learned from our past mistakes? That doesn't sound very good at all! Great repost!!!

Jun 26, 2012 07:33 AM
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Barbara-Jo -- you know the government, if they can stick their nose in and confuse the issue, they will.

Jun 26, 2012 08:14 AM
Hella Mitschke Rothwell
(831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker

Steven: I would have liked to be a fly on the wall of that inhouse loan officer and that agent.

Jun 27, 2012 08:27 AM
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Hella -- some of the folks who come in our door do not qualify, immediately, but we are willing to work with them to get them to qualification.  That conversation, between the agent and loan officer, after the loan closed would have been very interesting.

Jun 27, 2012 08:32 AM