Making the Mortgage Borrower SAFE

Today, I'm completing my mandatory 20 hours of "pre-licensure" education in the mortgage industry, even though I've been a professional in the New Hampshire mortgage industry for 6 years; was awarded the Mortgage Bankers and Brokers Association in NH's President's Award in my second year; completed (and then helped to develop) the MBBA's educational courses, totaling over 30 hours of history, mechanics, products and process when I entered the industry. I expect to have completed the requirements for MBBA-NH's Certified Mortgage Professional - their highest level of certification - by the end of the year, and am scheduling the test to get certified by the National Association of Mortgage Brokers.

But according to the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, ALL mortgage professionals who do not work for a depository bank, are required to take a 20 hour "core pre-licensure" course. That's Mortgage Origination 101. I'm learning how to calculate the loan to value of an $80,000 on a $100,000 purchase. With a calculator. It's painiful.

When I started in this business, qualification and training consisted of "Congradulations! You're a Loan Officer. There is your phone. Now get busy."

As a professional in a complex field, I completely support licensing. I completely support required education to maintain that license. I question the efficiency of the current registry system (even the web site is a navigation disaster) but I applaud the intent. Realtors need a license. Financial advisors and insurance salespeople need a tough license. To think that people with no qualifications could become loan officers is sad, and I'm glad we're looking to fix that.

But under today's rules, a professional with 20 years in the business, who owns his own mortgage company, has been responsible, ethical, honest and professional (which is why he's survived for 20 years) needs to take 20 hours of Origination 101, pass a national licensing test (which is fair) and then take a separate state test for EVERY state he plans to conduct business in. Here in New England, that's easily ME, NH, VT, MA, CT and RI for a total of 7 exams just to continue to originate loans in the northeast. There are no exceptions to this.

Unless you're working at a Big Bank. So long as your bank holds deposits, offers checking and savings etc, you're required to register with the national system - and then stop. So the person staffing the "lending center" down on the corner at a national Bank is presumed safe and competent to lend in all 50 states, without a background check, or licensure, or required education, or any more expertise than was required to be hired for the job.

Before you pick up and call the 800 number on your bank statement looking for a new mortgage and speak with an operator in Texas (hopefully) about your new home in Concord, NH or anywhere else consider this: your local mortgage broker is better educated, more thoroughly screened, and has stricter professional requirements than your bank. If that's important to you, you should feel very SAFE working with a specialized mortgage company