Keeping your company in compliance with the laws is essential to the overall success of any business. This is a general fact in most businesses, but when you are operating within the mortgage and financial industry, there are swift penalties to be paid if you are non-compliant. Fines and even imprisonment can be what you are facing if you do not have the proper knowledge and training. Consumers had somewhat lost faith in using a broker to find their loan when there had been so many foreclosures caused by broker activity. Borrowers depend on the honest assistance of mortgage brokers and the housing industry has renewed some of their faith by instituting new regulations. By staying within the regulations set forth, mortgage brokers can now have a lucrative business once again.
Mortgage broker training is not optional when you are running a mortgage business. Training is necessary for all employees, whether you are considered an originator, loan officer or the owner of the company. There are many new rules since 2008 when the Federal Reserve and HUD revised their regulations to prohibit unfair practices. Disclosing yield spread premiums is also one of the new rules, so that the consumer is fully aware of what they are paying. Your mortgage broker training will cover these new laws, as well as adhere to the SAFE Act. SAFE stands for Secure and Fair Enforcement for Mortgage Licensing Act. It was placed in effect to regulate broker's activities and to ensure that every rule is being followed.
According to the SAFE Mortgage Licensing Act of 2008, the roles of loan officers, processors and originators have been more defined. There are licensing requirements for anyone that will be originating loans for the public. Loan processors and underwriters that are supervised and not directly performing origination duties will not require licensing or registration. Licensing is no longer an option for independent loan originators or contractors, so it is advantageous to find the mortgage broker training that offers courses for loan originating to remain in compliance with the law.
The SAFE Act mortgage broker training will entail 20 hours of study towards your NMLS approved education. The training will consist of 2 hours of instruction relating to nontraditional mortgage products and lending standards, 3 hours of laws and regulations on the Federal level and 3 hours worth of ethics. The ethics area will include consumer protection rules, instruction on fraud and all of the fair lending issues. In addition to those 8 hours of training, there will be an extra 12 hours of instruction that is undefined on the practices of mortgage origination. When you are finished with those courses, you can take the NMLS state and federal tests to achieve the licensing that is required in your state. Being properly trained and licensed is the best way to protect your company and its assets.
If you are looking to obtain your state issued mortgage broker license and want to run your own business, there may be other stipulations that you will need to fulfill, along with the mortgage broker training. Licensing for originating loans and operating a business, along with holding a surety bond are a few of the things that may be required for your state. Each state has a list of requirements that you will need to investigate in order to stay compliant. No matter where you broker the mortgage loans, you should look into the training that will keep your company compliant and successful.