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Ask The Expert: What’s Changes Are Coming to Licensing Requirements?

Betty from Texas asked the following question: “I heard that there are changes coming in licensing requirements. I am planning on hiring several originators in the coming months. Can you give me the scoop?”

Dave Hershman

Dave: I have asked licensing expert, Scott Weghorst of Diehl and Associates, to give a synopsis of the changes. Here’s what he said to say:

Ever since the SAFE Act was enacted, loan originators were required to meet all of the licensing requirements including education and testing and have the state that they are getting licensed in approve their application before they could conduct any origination activities. Unless they were working for a federal chartered bank. It didn’t matter whether the person was completely new to the industry or had originated for many years.

On November 24, this all changed with Temporary or Transitional Authority being implemented. MLOs will be able to move more easily between a bank and a mortgage company. The transition will lose a lot of the difficulty with the ability to immediately originate as someone moves from a bank to non-bank. The MLO will still have to take the 20-hour course and pass the test before the temporary period expires, which will happen 120 days after the license application is submitted. A background check with fingerprints and a credit report must be run as well.

In addition, another change was just announced that will make it far easier for MLOs to complete the state specific pre-licensing courses that are required. Mortgage loan originators that want to gain licenses in additional states have far fewer hoops to jump through with the course being much more flexible and easier to complete.

Until now, a licensee would need to sign up for a state pre-licensing course that was being offered in an online instructor lead format. This means they had to pick the date and the time slot of that course and during the chorus communicate with the instructor who would grade assignments and allow them to progress throughout the course. As of November 1st, the format of these courses changed. Education providers are able to put together an online course for that state which will allow the student or licensee to complete the course any day, and at any time and do so without an instructor on the other end of the course.

Being a provider since the NMLS was first established, this is a major change to make it far easier for students to complete this required training.

Dave Hershman is Senior VP of Sales of Weichert Financial and the top author in the mortgage industry. Dave has published seven books, as well as hundreds of articles and is the founder of the OriginationPro Marketing System and Mortgage School – the online choice for expert mortgage learning and marketing content. His site is www.OriginationPro.com and he can be reached at dave@hershmangroup.com.

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