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Debra Killian

Can MLOs Truly Be Independent Contractors?

May 2, 2025

Are Your MLOs Truly Independent Contractors?

Many mortgage companies classify Mortgage Loan Originators (MLOs) as independent contractors. However, federal laws—including the Department of Labor’s guidelines, IRS rulings, and the SAFE Act—suggest otherwise. These regulations emphasize that MLOs often function as employees due to factors like company control, lack of independent business operations, and mandatory sponsorship requirements. Misclassification can lead to significant legal and financial repercussions.

Read our latest blog post to understand the implications and ensure your compliance.

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Debra Killian

What It Takes to Pass the NMLS Test!

March 18, 2025

If you are thinking of getting a Mortgage Loan Originator State License, you should know the NMLS pass rate for first-time test-takers is in the mid-50s. To clarify, that means roughly half of everyone sitting for the first time fails! Why? The NMLS exam isn’t something you can pass simply by skimming a textbook or taking a quick course. Many test-takers underestimate the depth of knowledge required in areas such as federal regulations, ethics, mortgage …

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Debra Killian

Mortgage Training Doesn’t Have to Be Overwhelming or Expensive—Here’s a Better Way!

February 21, 2025

Looking for a smarter, more affordable way to learn the mortgage business?  Starting a career as a mortgage loan originator (MLO) comes with a steep learning curve. You need to understand loan products, guidelines, compliance rules, and how to build relationships with clients—all while trying to grow your business.  For many new MLOs, training is either too expensive, too overwhelming, or simply not provided by their company. That often leaves them struggling to learn on their …

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Debra Killian

California’s AB 3108: New Felony Charges for Mortgage Brokers

February 11, 2025

When a Borrower Doesn’t Qualify for Conventional Financing—Think Twice Before Defaulting to Non-QM! It’s tempting to label a loan as investment purpose when a borrower doesn’t meet conventional guidelines—even when they plan to occupy the home as a primary residence. Well, that loophole just slammed shut!   California’s AB 3108 just changed the game. The gig is up! According to A.J. Dhaliwal and Sherwin F. Root of Sheppard, Mullin, Richter & Hampton, LLP, the party is …

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Debra Killian

What New Mortgage Loan Originators Need to Know That Nobody Ever Tells You

August 26, 2024

The mortgage origination field can seem quite appealing, offering the potential for high earnings, autonomy, and the satisfaction of assisting others with their home financing. However, this allure often leads to unrealistic expectations and, ultimately, disillusionment and failure. True success in the mortgage industry requires setting realistic goals and taking full ownership of your career. Many companies tend to over-promise and under-deliver, advertising top-tier rates, extensive support, and lucrative compensation plans to attract newly licensed …

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Debra Killian

When Starting a Mortgage Broker Business…Hope is Not a Strategy!

August 1, 2024

I have been receiving many inquiries about what it takes to start a mortgage broker business and how to get started.  I recently spoke to a gentleman who thought he wanted to start his own business, but after our lengthy conversation, he came to the conclusion “I just want to originate.”  How much time and money did a conversation possibly save him? In 1994, I became an originator.  I was being recruited by a local …

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Debra Killian

The Top 10 Reasons to Teach Real Estate Continuing Education!

July 16, 2024

For the past 20 years, I have been teaching real estate classes. Initially, I began teaching as a way to build and maintain professional relationships and gain referrals. Unlike sponsoring open houses or arranging casual coffee meet-ups, I found that educating was a more effective and respectable approach. The courses I taught were not just general marketing or time management workshops. They were state-approved continuing education (CE) courses, allowing agents and brokers to earn credits …

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Debra Killian

DOL Closes the Door on Mortgage Originators Paid as Independent Contractors

January 13, 2024

In the fast-paced world of mortgage lending, a crucial yet often overlooked issue is always lurking between companies and those mortgage loan originators they employ;  the misclassification of mortgage loan originators. Often labeled as independent contractors, many of these financial professionals find themselves in a precarious position, unable to meet the stringent criteria that truly define independent work. This mislabeling is not just a minor error in terminology, but a significant concern that raises questions …

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Debra Killian

Under 20 Employees? Your Business May Be Subject to New Beneficial Ownership Interest (BOI) Rules!

October 25, 2023

I usually write about mortgage or real estate professionals, but since I teach Anti-Money Laundering classes, I thought it would be helpful for all small businesses to know what’s coming. On September 18, 2023 the Financial Crimes Enforcement Network (FinCEN) published the final rules for the new Corporate Transparency Act (CTA). These rules become effective January 1, 2024 and in typical government practice, there is a Small Entity Compliance Guide. This new law is related …

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Debra Killian

CFPB Issues Fines for Favors: Mortgage and Real Estate Firms Handed $1.95M Penalty for RESPA Violations

August 17, 2023

In a startling turn of events, two major players in the mortgage and real estate industry have been dealt a hefty blow with fines totaling a staggering $1.95 million. The penalties come as a result of their failure to comply with the Real Estate Settlement Procedures Act (RESPA), a federal law designed to safeguard consumers in real estate transactions. The mortgage company, known for its prominence in the market, and the real estate agency, a …

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Debra Killian

7 Hours in Front of 125 Real Estate Agents! Loan Originators Pay Attention! Now Is The Time…Learn to Teach Real Estate Continuing Education!

March 29, 2023

In the last 3 weeks, I spent 7  hours in front of 125 real estate agents!  A captive audience.  Curious how I got there? If you’ve read this far, this is not a brag post.  It’s an opportunity for you to get in front of your target audience and with someone else driving them into your seats!  It’s to make you realize, you have to be different from your competitors to get different results than …

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Debra Killian

Jeanne Kelly & Debra Killian Announce New Program for Originators Working with Realtors!

January 3, 2023

Join Jeanne Kelly Credit Coach and Debra Killian on Credit Over Coffee as they discuss getting into the mortgage industry and Debra’s E-Course, Mortgage Origination Practices. 2023 will be a challenging year for most mortgage companies and originators. Everyone wants purchase business. This podcast will change the way you you invest time and money. Learn why knowledge will become essential for 2023 and beyond. Debra Killian  (866) 256-3766 deb@cloes.online  cloes.online

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Debra Killian

Employee or Independent Contractor Classification Under the Fair Labor Standards Act

December 20, 2022

On October 13, 2022 the Federal Department of Labor published findings in Vol. 87, No. 197 of the Federal Register. The W-2/1099 controversary hits many businesses.  As stated in previous posts, there is no special 1099 consideration for mortgage loan originators.   Regardless of which state you work in or which type of employer your work for,  Mortgage Loan Originators are required to have their income reported on IRS Form W-2. There are many companies that …

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Debra Killian

Mortgage Company Compliance Requirements for AML Training

July 11, 2022

How does a mortgage company meet the statutory requirement for Anti-Money Laundering education? The question comes up because many companies do not comply with the annual education requirement for all employees. In our opinion the law and regulations on AML training is purposely not specific because the term education is defined by the outcome and not the input. More simply put if you understand the requirements of the law you are educated. To be sure …

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Debra Killian

UDAAP-ECOA-TILA Are You Ready for Examiners?

May 27, 2022

The overlap between federal and state laws and regulations becomes very apparent once there is an examination and/or an enforcement action. With COVID dominating our work environment over the past two years, not many audits or exams were scheduled by state regulators.  That is all about to change.  They are way behind and will begin the process of catching up sooner than you may be ready for. In many cases where mortgage companies get caught …

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Debra Killian

8 Episodes of Fundamentals of Processing Teaches the WHY!

May 15, 2022

Mortgage Processing Fundamentals is an on-demand, video recorded program which presents the base of knowledge needed to succeed at residential mortgage processing. The course is written and presented by a 25-year seasoned loan originator who has processed her own loans. The fundamentals are universal and can be applied to any processing position.  While processors perform some or all the included functions, the course provides an overview of all the necessary responsibilities and tasks to move …

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Debra Killian

Changes to the Appraisal Form and Data Coming!

March 16, 2022

With the new URLA behind us…along comes the next major change in residential lending. Fannie Mae and Freddie Mac (aka the GSEs) have provided an update on the new URAR.  Yes, the Uniform Residential Appraisal Report is undergoing some major changes.  Here are just a few highlights: Input was gathered from 107 stakeholders across the industry in designing the new form.  The key benefits of the new form are: Dynamic output with commentary placed within each …

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Debra Killian

The Feds Beef Up Employment Enforcement on Independent Contractors

February 14, 2022

With rates going up, refinance volume quickly heading south and originators looking for the next shiny thing, we are bound to see movement in the industry.  That means mergers, buyouts and some companies closing.  Migrating originators can be a tricky challenge for the next employer.  There are two issues that may surface; who owns the customer and how were the originators compensated?  I’ll save the former for another time.  Last week I received a call …

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Debra Killian

Fannie Mae COVID Guideline Change

February 2, 2022

With the pandemic pointing toward endemic, it’s a relief that the GSEs are starting to look at removing some of the COVID-related guidelines.  Self-employed borrowers may find it a bit easier to qualify for a mortgage now…,just in time as rates head up. Fannie Mae just released an update effective today, February 2, 2022. There is a summary at the end of the announcement. Remember, the devil is always in the details.    

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