Wednesday, April 16, 2014

Safe Harbor for Mortgage Loan Originators Career? – Licensed vs. Registered MLO

Would you get mortgage advice from a disc jockey with a nice conference room?  Can you tell the difference?     
Mortgages are an important Consumer Product and meeting educational certifications along with passing the national NMLS with state content exam is the safeguard a consumer deserves supported by laws passed by your government. 

With 80% of the pre 2009 mortgage service providers out of the mortgage industry, the value of a Mortgage Loan Originator’s, MLO’s, career is at an all-time high and its continuation depends on choices made today.

As the yield curve begins to hold trend in a northerly direction, our industry is entering a phase of the recovery cycle similar to the 2001 – 2005 surge without the unsustainable high risk products.  The products that will be sold are primarily QRM or “Standard Loans” provided by the GSEs, “Fannie, Freddie & Ginnie (Conforming, FHA, & VA)”.  MLOs will need to be close to the source of these products which is the Seller / Servicers approved by these entities.  As you move away from the GSE source as a correspondent, local bank registered MLO, or broker; service, accessibility, and pricing suffer.  Do you get a better price buying an apple direct from an apple farmer or Publix?  Same concept and principle in the mortgage industry and both are commodities.

The mortgage service providers in this cycle will primarily be two types:

Ø  Banks that employ Registered Mortgage Originators and cannot sponsor a Licensed Mortgage Originator


Ø  Non-Bank Mortgage Lenders that employ only Licensed Mortgage Originators.  Non-Bank participants can be a broker, correspondent, or a vertically integrated GSE Seller / Servicer.  All specialize in mortgage products and employ Licensed Mortgage Originators according to the S.A.F.E. Act, Dodd Frank Act and State banking agency requirements.

MLOs in our industry have to make choices today to secure their career as our industry evolves.  As everyone knows, if anything is certain its change in the Mortgage Industry.

Understanding the truth about earning a higher certification as a Licensed Mortgage Originator versus being a Registered Bank Mortgage Originator is critical to a good choice.  Avoid the fear tactics and miscommunication and focus on the facts that dispel the myths.

The Truth

·        Based on prior history of other products requiring a license to sell, regulators will require banks to license all Registered Loan Originators.  Banks have similar experience with Mutual Fund Sales (Series 6/63) and Consumer Loan Insurance.  Both had a period of adjustment and both eventually required all sales people selling the products to be licensed by FINRA (formerly the NASD) and the Insurance Commissioner respectively.  Neither of those caused a recession, Mortgages did?  Either through reserves or direct intervention, Banks will license all MLOs at some point.

·        Non-Bank Mortgage Lender’s like Southeast Mortgage (SEM), have higher mortgage certifications than many Banks.

·        Get licensed today and remove uncertainty before time runs out.  It will.

·        Non-Bank Mortgage Companies pay MLOs more than Banks.  Same work why not receive higher pay?  Why? Because registered originators allow it and inertia has them.

·        Since Non-Bank Mortgage Companies specialize in one product, service is superior and faster.

·        Name your shareholders at a Bank?  Are you a member of the LLC?  Do you really know who you work for?  Build a career and trust your shareholders and hopefully they work alongside you.
Dispel the Myths

·        Don’t succumb to fear tactics.  Becoming a Licensed Mortgage Originator is a straight forward process.  Would you buy stock from an unlicensed stock broker?  Would you seek retirement advice from a Disc Jockey that appears to talk the talk?  Your family deserves the certainty of licensing as set forth by Congress.

·        Don’t talk yourself into believing Bank comparable training is the same thing as studying and passing the national NMLS with state content exam.  Ask any Bank Registered MLO that has passed the test if there is a difference.

·        The Georgia Department of Banking and Finance is very cooperative and will discuss issues to help you through the process.  They respond promptly and will answer your questions.  It is important to follow the rules during the licensing process.

·        For Realtors and Builder’s service and speed matters.

·        If you have a license, you will welcome change.  If you are unable to be licensed, you know the deficiencies and can make a plan to correct them before it’s too late.

Becoming a Licensed Mortgage Originator removes the inherent risk of Banks switching to employing only licensed MLOs.  Protect your career and your family’s income by earning your MLO License and enjoy the next 5 years without concern.
Southeast Mortgage of Georgia, Inc.
3496 Club Drive, Lawrenceville, Georgia 30044
Phone: (770) 279-0222
Georgia Residental Mortgage Licensee #6578
NMLS #103956

No comments: