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Brokers, Banks, and Mortgage Bankers Must All Be Licensed Nationally, and They Have to Tell You This.

Part of the Secure and Fair Enforcement Mortgage Licensing Act of 2008 (SAFE Act) required all people who originate mortgage loans to be licensed. Prior to 2008, licensing requirements for loan officers varied from state to state. Even as late as 2009, not all states required loan officers to meet certain standards, have their backgrounds checked, and meet certain education requirements. Now, however, not only is there a national standard for licensing, but each loan officer in the entire country is issued a unique identifier that monitors both his employment and his activities.

Individual states have slowly implemented licensing standards for loan officers over the years, and, as can be expected, these licensing requirements vary from state to state. The SAFE Act doesn't eliminate the licensing requirements that states have previously issued but makes sure that they meet some minimum requirements. Those are:

• National testing of mortgage loan originators

• Criminal history record information checks

• Credit report checks

• Nationally approved prelicensure and continuing education

• Surety bond/recovery fund requirements

Now that all loan officers are regulated, there should be a minimum level of expertise. Mind you, that's not a guarantee that you're going to get the most competent loan officer, but you'll know that you're not talking to a loan production assistant or loan "counselor" who does nothing but prescreen loan applicants for the loan officers. If the person you're talking to tells you that she doesn't have a license or that she's simply in the production department, then stop talking to her and begin working directly with the loan officer.

 
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