The Nationwide Mortgage Licensing System
Posted by: Carleton Sheets in resolution, requirement, Nationwide Mortgage Licensing System, mortgage originator, mortgage fraud, mortgage broker, loan originator, licensing, license, educational, education, database on Aug 31, 2009.
The New York Times reported last week that a program called the Nationwide Mortgage Licensing System has been initiated. The system acts as a repository where state regulators keep information on all mortgage originators, and also creates a standard for education, testing and licensing of loan officers.
During the housing boom, some dishonest mortgage originators steered consumers into subprime loans, or conducted other fraudulent activities. If the originator got caught in one state, it was fairly easy for them to set up shop in another.
The Nationwide Mortgage Licensing System will now allow states to track and identify mortgage originators in this event. It will also confirm licenses, employment history, specific education, and any complaints filed against a mortgage originator.
Although it is a big step for regulation in the mortgage origination industry, some industry executives are disappointed because the coverage for those mortgage originators who work for federally chartered banks like Bank of America, Wells Fargo, Citibank and JPMorgan Chase is not as extensive. These employees are not subjected to the same licensing and educational requirements as employees of state-chartered banks. But the article reports that these loan originators will still register with the System, where details such as disciplinary actions can be tracked.
This database is scheduled to be up-and-running by early 2010, and consumers will be able to visit a website to view mortgage originators information.
When I read this article, what surprised me most was that until the foreclosure crisis deepened, 14 states did not regulate mortgage brokers at all. Furthermore, as of the publishing date (August 23, 2009), two states have not yet agreed to participate in the System. Just curious if anyone knew the reasons why?
written by David Davis, January 26, 2010
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written by John Cosme, March 10, 2010
Thanks,
John C.
