Your cost for new mortgage compliance

Minneapolis, MN: We all know about, and most of us have been effected by the real estate and mortgage industry meltdown. The government agencies, many of which have been created since the meltdown, including the Consumer Financial Protect Bureau (CFPB), come at a significant cost to you for their new “protection” and compliance rules.

cfpb_logoDid you know the average cost of originating a mortgage climbed from $2,291 in 2009 to $3,353 in 2013? That’s because today, mortgage lenders must comply with about 350 different federal, state and local rules. Of course those charges are past on to you.

The sad thing, is very little within the new rules have actually made a large difference on the street. Rather, most of the rules have done little to correct anything  except reduce consumers ability to get loans. The increasingly stringent laws and regulations are affecting the mortgage industry and leading to higher costs and risk for lenders.

A great example of the new laws and costs, yet didn’t hit its mark has to do with the difference between licensing requirements for Loan Officers. If your Loan Officers works at a bank, credit union, or mortgage company owned by a bank or credit union, the Loan Officer has no mandated educational requirements, no state or federal requirements, no continuing education requirements, and simply has to get registers into the National Mortgage Licensing and Registry System (NMLS).

On the other hand, if your Loan Officers works for a non-bank lender, or for a broker, they must complete educational requirements, plus pass both state and federal testing requirements. They are also required to have yearly continuing education.

This means that today, roughly 80% of all Loan Officers are unlicensed, with no mandated testing or education, yet the vast majority of consumers believe all of them have a license.

nmls_checkTo check if your Loan Officer is licensed, go to  Type in the Loan Officers name or NMLS number. At the bottom of the page, it will say Licenses/Registrations.  If there are one or more states listed, that Loan Officer is Licensed.  If it says “Federal National Loan Originator”, that person is NOT licensed.

When getting a mortgage loan, likely the largest financial transaction of your life.  If is probably prudent to work with a licensed professional.

DID YOU KNOW? Not all Loan Officers are Licensed!

DID YOU KNOW? Not all Loan Officers are Licensed!

Buying a home? Need a home loan? You call the various banks, brokers, and mortgage lenders shopping for the best deal, thinking this is the correct way to get a mortgage loan. Unfortunately, you’ve only did half of your homework, as the big issue is NOT where you get your mortgage from, but WHO you get your mortgage from. There are major differences in the quality, education, and experience between Loan Officers, and you DON’T want to be working with the wrong person.

Until recently, most Loan Officers got their training simply by being hired, given a desk, a telephone, and the employer saying “Watch and learn from this guy.” There were no schools, no classes, no educational or background requirements. A very small number of Loan Officers would take voluntary classes to be the best they could be (like myself), but this was the exception, not the rule.

As of January 1, 2011, there are two distinct classes of Loan Officer. Those with or without a personal license. Those WITH a personal license must have pre-license education, pass a difficult Federal test, pass a difficult state test for every state they wish to conduct business, criminal background checks, personal credit report checks, and having continuing education every year thereafter. Those without? No requirements at all (yikes!)

Furthermore, those WITH a personal license, YOU CAN LOOKUP ONLINE to verify their license, the company they work for, the company license, what state(s) they are  license, any disciplinary action, and where they have worked for at least the past 10-years. The system is called The Nationwide Mortgage Licensing System and Registry (NMLS). The NMLS Consumer Access web site is a fully searchable website that allows the public to view information concerning state-licensed companies, branches, and individuals.

Those Loan Officers who have a personal license are required to place their NMLS number on all materials; web sites, brochures, business cards, E-Mail, etc.

NMLS - Verify your loan office or mortgage company

Finally, THIS IS A CLEAR REASON why people should follow my other mortgage shopping rule: GOOGLE THE NAME OF YOUR LOAN OFFICER, and check them out in the public NMLS registry. What do you find before allowing them to handle the largest financial transaction of your life!

Be Smart – Get Answers. Your financial future is too important to gamble with than to simply use the guy at the bank, or the person giving you a low quote on some web site!