Mortgage Loan Originator License:  An Absolute Must For Mortgage Professionals

Having a mortgage loan originator license is a must for anyone who wishes to practice as a professional receiving compensation for arranging for and negotiating for the terms of residential mortgage loans.  This is a legally mandated requirement as stipulated in the Secure and Fare Enforcement for Mortgage Licensing Act (SAFE Act) which was passed in July of 2008.  Ensuing state laws and regulations setting forth the provisions of the SAFE Act and particular state requirements pertaining to the granting of a originator license were also put to action with state agencies being required to register with the Nationwide Mortgage Licensing System and Registry (NMLS).

The NMLS is the official record repository of everything pertaining to mortgage licenses issued to companies and mortgage professionals.  Although the NMLS does not grant the license in itself, it is develops the written license examination and accredits test providers to administer the examination.  There are no educational pre-requisites to taking the  examination but there are certain requirements that applicants for such a license need to meet to be granted the authority to practice in their state.

The Mortgage Loan Originator License Examination

According to the provisions of the SAFE Act, mortgage loan originators should pass a written qualifying test to prove that they have adequate knowledge about pertinent mortgage origination concerns such as:  the federal and state laws governing mortgage origination and real estate purchases; ethical practices in the mortgage industry; issues on fraud, customer protection, and fair lending; and the non-traditional mortgage marketplace.  There are two components to the mortgage loan origination examination or the SAFE Test:  the national component and the unique state component.  To get a mortgage loan originator license, an applicant has to pass each component with a score that meets the minimum score requirement.

Those who wish to practice in more than one state should pass the unique state component test offered by the states where they intend to practice.  The examination, however, is not the sole requirement to get the originator license.  In addition to federal requirements such as passing the criminal background check and an independent credit report, an applicant for a mortgage loan originator license must likewise satisfy the requirements of the state’s regulatory bodies.

Preparing for A Mortgage Loan Originator License Examination

An applicant for should first register with the NMLS.  The registration procedure is done online through the NMLS website where either the applicant or his employer can create a mortgage loan originator’s account or the NMLS Form MU4.  Those whose employers are creating the account for them would have to wait to be notified for the account verification procedure.  Upon confirmation of the contents of the NMLS Form MU4, license applicants can already pay the necessary fees and put together the requirements for licensing as detailed in the website.

A mortgage loan originator license endorsement is issued upon successful completion of the national and state specific mortgage loan originator license examination components, a mortgage loan originator licensee endorsement application, fingerprint specimen for FBI checking, and an authorization for NMLS to get a credit report.  Although a 20-hour pre-license education course is recommended, such course is not a pre-requisite to taking the national and state specific license examination.

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