Category: NMLS Licensing Education

November 24, 2019 – That’s not a typo, yes, it’s one year away!

Did you know federal law mandates states implement “transitional licensing authority” by November 24, 2019? 

If you manage originators in a depository, have you considered if this will impact you and if so how?  How about recruiters for non-depositories? Will bank or credit union originators, want to move?  Will non-depository lenders start to aggressively recruit?  Should depositories empower their originators NOW to get ahead of it?

Time will tell. One thing is sure; opportunities for movement are coming!

I know, one more thing to worry about, thanks Deb!  Banks, lenders and brokers are currently adjusting staffing and production goals for higher rates, low housing inventory and a dried-up refinance market, not to mention fintech!  I think it is safe to say, all origination channels will face challenges next year.  Many we don’t have much control over.

However, transitional licensing is something businesses do have some control over and the time to start planning for it.

Since the SAFE Mortgage Licensing Act of 2008 passed, the requirements for state-licensing have somewhat handcuffed registered originators who want to move from depository employers to a non-depository or from one state to another.

In 2015 the NMLS issued responses to transitional licensing. For over ten years, mortgage brokers and lenders have been at a disadvantage in attracting and hiring experienced, but un-licensed MLOs who were registered with federally chartered or insured depository institutions.

In November 16, 2017, House bill H.R. 2948 was introduced: To amend the S.A.F.E. Mortgage Licensing Act of 2008 to provide a temporary license for loan originators transitioning between employers, and for other purposes, was incorporated into Senate bill S. 2155 Economic Growth, Regulatory Relief and Consumer Protection Act and signed into law May 24, 2018.

Title I Section 106 Eliminating barriers to jobs for loan originators

Under the new law, mortgage loan originators will have “temporary authority to originate loans moving from a depository institution to a non-depository institution.”  The new law states, upon becoming employed by a state-licensed mortgage company, registered originators may continue to act as a loan originator (provided certain criteria is met), for 120 days to complete the SAFE Act state-licensing requirements. The effective date was 18 months from enactment, making it November 24, 2019.

So, in theory, a mortgage originator meeting the application and experience requirements can be employed by a depository as a registered originator on Monday and move to non-depository on Tuesday.  Think about that!  That’s pretty, big.  Okay, maybe it’s not quite that fast or simple, but it might as well be.

What to do?  All entities need to start thinking about positive and negative impacts on their business.  It will be here, before we know it.

Will your business be prepared?

For more information email: deb@cloes.online.

 

 

 

 

 

Did the game just change?   For the sake of full disclosure, I am an originator, course developer and trainer.

I think you may want to read the recently released guidance.

This is not a secret. Consumers do not know the differences between “individual originators,” registered or licensed or brokers, lenders or banks. They think we all do the same thing with a similar level of knowledge. It’s just one reason why there were so many problems leading up to the crisis. And while we in the mortgage business know the reality, the BCFP may have just leveled the playing field a bit!

According to the CFPB November 9, 2018 released Loan Originator Rule – Small Entity Compliance Guide.

Can you answer this question?   What training must a loan origination organization provide for loan originator employees, not required to be licensed under the SAFE ACT?

The rule requires “individual loan originators NOT licensed under the SAFE Act, to be trained in “the responsibilities of individual loan originators and the nature and complexity of the mortgage loans they work with.” It requires “periodic training be sufficient in frequency, timing, duration and content.”

So, weren’t depository institutions always training their MLOs? What’s different now? The BCFP (aka CFPB) specifically states:

“You must provide periodic training covering federal and state law requirements that apply to an individual’s loan origination activities. This training requirement applies to individual loan originators regardless of when you hired them. (§ 1026.36(f)(3)(iii)). You are required to provide training to your loan originator employees.”

Okay so the good news is, originators do not have to be provided training on requirements and standards that apply mortgage loans they do not originate, or on subjects about which they already have knowledge and skill. I wonder how the BCFP will assess “knowledge and skill? Does your company assess your originators? How often? What about changes to products, regulations and guidelines?

It also states that registered employers “may use NMLSR-approved licensed loan originator continuing-education training to satisfy the training requirement of this rule, to the extent that it covers the types of loans the individual loan originator originates and applicable federal and state laws and regulations. (See 12 CFR 1008.107(a)(2) for information about NMLSR continuing-education requirements.)

Providing the content is one thing. Keeping a system to demonstrate compliance is another thing. Without incurring the costs of recruiting, hiring, training the trainers and setting up a system to maintain records, how can depositories offer efficient compliant training?

YOUR solution! CLOES.online offers the periodic training, with the frequency, timing and duration for loan origination activities required under the rule.

We provide customized programs for your specific needs and record and maintain results, to provide you with timely reporting.

Since 1999, we have trained thousands of originators. Charter Oak Systems, LLC is an approved education provider with the NMLS, Provider # 1405047. We write, produce and instruct all our own content.  We promise, you won’t get it anywhere else!

It’s worth a phone call to find out how to help you get ahead of your next audit.  Call us today! (772) 228-6115 or email deb@cloes.online.