Is your Lender Licensed or just Registered? What's the difference?

When you have found the perfect home and are ready to go through the mortgage process, you will need to contact a loan originator. What many people don't know is that there is a big difference between a State-Licensed Mortgage Loan Originator and one that's only been registered. If they have been state licensed, then they've also passed a series of exams and received their own NMLS number. If your lender does not have an NMLS number, they're most likely registered under their Lending Institutions License and may not have completed the training to be officially licensed in their state.

As of July 1, 2010, new policies were set in place that require Mortgage Bankers and Brokers to be licensed through the Nationwide Mortgage Licensing System. The requirement for being licensed includes passing state and federal tests, background checks, finger printing, pre-eduation and continuing education. They must complete 20 hours of educational classes and pass two separate and lengthy tests.

If they've failed the test, they must wait 30 days before retesting. If you fail 4 times, you have to wait 6 months. Those that are simply registered do not have any of this. The Secure and Fair Enforcement for Mortgage Licensing Act of 2008, or the S.A.F.E. Act, requires the Agencies to maintain a system for loan origination to protect consumers. Some 60% of registered lenders do not pass their exams. Before you begin working with an originator, take the time to check if they are correctly licensed by visiting the NMLS consumer access page.

You can also call us at Crosscountry Mortgage if you have any questions. 877-828-8851.

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