There are differences in Loan Officer qualifications. Know how to tell who you are working with

Is your Loan Officer Licensed, or simply registered? There is a BIG difference YOU need to understand

Recent changes to the lending industry requires all loan officers to have a tracking number, known as an NMLS number (Nationwide Mortgage Licensing System and Registry). It should be displayed on their business cards, E-Mail, web sites, all correspondence, and most loan documents.

The display of the NMLS number may make many believe the Loan Officer is licensed. Sadly, this isn’t true, and working with an unlicensed, untrained Loan Officer can cause you many headaches and hassles.

Simply put, Loan Officers at Banks, most Credit Unions, or Mortgage Companies owned by a bank are NOT REQUIRED to be licensed, take classes, pass any tests, take continuing education, or pass any state or federally mandated tests to be a Loan Officer!

CHECK YOUR LOAN OFFICER OUT on the Nationwide Mortgage Licensing System and Registry at http://www.nmlsconsumeraccess.org

My NMLS # is 274132

It is hard to determine if the Loan Officer is simply registered, versus licensed. When looking up a loan officer, you have to go to the bottom of their NMLS identification page and look under State Licenses/Registrations or Federal Registrationheading.

  • A LICENSED Loan Officer will say “State Licenses/Registrations” and will have one or more STATES listed with licensing information.
  • An UNLICENSED, but simply REGISTERED Loan Officer will say “Federal Registration” and the something like Federal Mortgage Loan Originator.

Who is Best? Banks, Brokers, or Direct Mortgage Lenders?

Now I am not trying to make this into a David versus Goliath story, but I am trying to emphasize the huge differences between Loan Officer training. As the new requirements have been rolling out across the country, many Loan Officers who have been unable to meet the new licensing and testing requirements, and especially those who have failed the new tests, have simply gone to the large banks to work.

Calling “1-800-Big-Bank” to get a loan??? YIKES. Here is a chart to show the differences:

SAFE ACT Loan Officers
(MLO’s)
Bank Loan Officers (RMLO’s)
Have Personal License Yes No
Registered in NMLS Yes Yes
FBI Background Yes No
Fingerprinted Yes No
Surety Bonded Yes No
Pre-Employment education Yes No
8 hours continuing education each year Yes No
Personal Credit checked Yes No
Pass Tough State Test Yes No
Pass Tough Federal Test Yes No
Complaint mechanism’s Yes No
Licensing fees and renewals Yes No
Loan Officer Designation MLO RMLO
NMLS = Nationwide Mortgage Lender System and Registry (Tracking Number)
MLO = Mortgage Loan Officer (Licensed and Trained)
RMLO = Registered Mortgage Loan Officer (simply registered)

I think the choice is clear. Who would YOU rather be working with on the largest financial transaction of your life? A fully trained, licensed, fingerprinted, and background checked Loan Officer – or the untrained, unlicensed, and simply registered Loan Officer at the bank?

The funny part is the cost for the service based on rates and fees are usually about the same, if not slightly cheaper in both rate and costs. Plus non-bank lenders usually close the loans faster, and have more knowledgeable and experienced Loan Officers.

The best S.A.F.E. ACT Loan Officer (non-Bank) analogy I can use is having a choice of working with an experienced CPA to do your taxes vs. you using Turbo Tax to do it yourself, but paying the same price.

Finally, THIS IS A CLEAR REASON why people should follow my #1 mortgage shopping rule: GOOGLE THE NAME OF YOUR LOAN OFFICER before allowing them to handle the largest financial transaction of your life!


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