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Tuesday, July 27, 2010

New Requirements for Washington Mortgage Loan Originators Implemented

The Washington State Department of Financial Institutions (DFI) has successful implemented new mortgage licensing requirements as required by the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the “S.A.F.E. Act”).

In order to better protect consumers, Congress passed the S.A.F.E. Act mandating that all mortgage loan originators, except those who work directly for banks or credit unions, meet certain professional criteria by July 1, 2010 and be licensed through the Nationwide Mortgage Licensing System and Registry (NMLS) in order to continue making or brokering loans.

Under the S.A.F.E. Act, mortgage loan originators must meet numerous professional requirements including:
  • 20 hours of pre-licensure education;
  • At least 8 hours of professional education each year;
  • Passage of a state and a federal test covering federal and state law and ethics;
  • A criminal background check; and
  • The maintenance of a surety bond that protects consumers from fraud.
Since March 1, 2010 the Washington DFI processed more than 2,800 applications from individuals and granted 2,163 licenses to those applicants who met the new standards.

Verify Licenses Of Mortgage Professionals
DFI recommends Washington residents always check the licensing status of the mortgage loan originator with whom they do business to ensure they can legally assist with the transaction.

A consumer can check the license status of any loan originator by looking up their loan originator on the NMLS Consumer Access where they can confirm that the mortgage company or mortgage professional with whom they wish to conduct business is licensed and where they are licensed. By doing so, it confirms whether they have met the new licensing requirements.