Check up on your mortgage broker
Posted on February 9th, 2010
Question: Is there any way for me to check up on the mortgage broker I am planning to use? I don’t want to be taken advantage of, so I want to make sure he’s licensed — he says he is — and see whether he’s ever been disciplined by authorities for doing something wrong.
Answer: There is now. Mortgage shoppers now have a free tool that will go a long way toward protecting them from being ripped off.
At NMLS Consumer Access, borrowers have a single source of information, updated nightly, that tells them whether the loan officer or broker with whom they are working is licensed, the company he or she is licensed with, the branch where the originator works and his or her employment history going back 10 years.
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The searchable Web site also lists any aliases or names other than the full name the individual has used since age 18, an indication of whether he or she is engaged in other sidelines, as well as license status in other jurisdictions. A borrower in California, for example, can learn whether the person he’s speaking with has ever had a license suspended or revoked in Nevada, Arizona or some other state where the broker has worked in the past. If so, the borrower may want to think twice about dealing with that broker.
Launched Jan. 25, NMLS Consumer Access is mandated under the Housing and Economic Recovery Act of 2008. A part of that legislation, known in the trade as the Secure and Fair Enforcement Mortgage Act, or SAFE Act, requires that consumers be given access at no charge to data regarding the employment records of and publicly adjudicated disciplinary actions against state-licensed and federally registered loan originators.
“The SAFE Act is taking an important step in returning integrity and accountability to the residential loan market,” said David Stevens, the commissioner of the Federal Housing Administration. “Implementation of this act is a critical addition to our system of regulatory protections that will benefit both consumers and financial institutions.”
The SAFE Act builds on the national licensing system started by state mortgage regulators 18 months earlier. The law requires that states become part of the National Mortgage Licensing System or face having Uncle Sam implement and administer a licensing system for them.
Currently, 31 states, the District of Columbia and Puerto Rico are in the NMLS. The remaining 19 states have indicated their intention to meet the federally mandated July 31 deadline.
Too late for some
Had the NLMS been in place five or six years ago, perhaps millions of people wouldn’t have been ripped off by shady loan originators who put them in mortgages they couldn’t afford just to make a commission or ran flipping scams and other schemes that cost lenders billions.
Back then, many states didn’t license loan originators. And even when they did, there was no reciprocity. So an originator who was caught doing something illegal in one state could simply pack his bags, move to another state and hang out a shingle there.
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Worse, even when state regulators offered consumers data about licensees, the information often lacked clarity or standardization. That made it difficult for the public to distinguish among companies with similar names or find complete information on a single company if it used multiple trade names — or to find the company at all.
But that’s all about to change. “For the first time,” said Gavin Gee, Idaho’s director of finance, “consumers will have access to a centralized, very consumer-friendly repository . . . to check out the individual or company they are working with.”
At its start, NMLS Consumer Access will not contain enforcement actions taken by regulators. That functionality is still being built into the system. But eventually, it will display any publicly adjudicated verdicts that have been taken against a company or originator in question.
It hasn’t been determined yet whether the system will show the full order taken against the originator or just a summary of the order. But it will cover the full range of possible actions, including suspensions, fines, revocations, cease-and-desist orders and probation orders.
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Tags: Broker, Mortgage Broker
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