Since 2007, mortgage lending has evolved with necessary regulatory changes to protect both consumers and lenders. There is a new change in place that will require mortgage originators to have more training. These changes balance the educational requirements for mortgage originators, which ensure the consumer is speaking with someone who understands loan programs, lending guidelines, and so on.
What is a Mortgage Loan Originator?
For the purposes of the SAFE Act (see below), a mortgage loan originator (MLO) is defined as:
An individual who takes a residential mortgage loan application or offers or negotiates terms of a residential mortgage loan for compensation or gain. An individual real estate licensee acting within the meaning of Section 10131 (d) or Section 10131.1(b)(1)(c) of the Business and Professions Code (B&P) is a mortgage loan originator with respect to activities involving residential mortgage loans.
In a layperson’s terms, an MLO is the person or institution you work with to get your mortgage financing, such as a mortgage broker or a mortgage banker.
How is the consumer protected?
Consumer protection is a very important aspect to the mortgage originating process. Ocean Communities FCU and its MLO provide adequate time to make sure you are educated about the products you might qualify for, and how each of them may impact you in their own way. Generally speaking, most mortgage notes are for 30 years. That is a long term commitment, so please take the time and ask questions, shy away from impulse decisions, and really think your options through. Ocean Communities FCU wants what is right for you and your family.
The National Credit Union Administration (NCUA) regulates Credit Unions, and recently the NCUA has adopted the SAFE Act of 2008, which requires all MLOs to be registered with the National Mortgage Licensing System (NMLS). This system tracks the performance of all registered MLOs and make sure each complies with the regulations set forth in the SAFE Act. Every loan application taken by a MLO will have to include the MLO’s unique identification number for NMLS tracking purposes. All MLOs across the country will need to be registered with the NMLS by July 29, 2011.
If you are shopping for a loan after that date, do not hesitate to ask to see this unique identification number to assure yourself you are talking with someone that has the expertise to answer your mortgage questions. A common place where the unique identification number will be found is on the MLO’s business card.
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