The focus this month is on The SAFE Act (or the "Secure and Fair Enforcement for Mortgage Licensing" Act) a Federal Law that passed in 2008. The SAFE Act is designed to enhance consumer protection and reduce fraud by setting minimum standards for licensing and registration of state-licensed Mortgage Loan Officers (MLOs). The SAFE Act requires MLOs to pass a written qualified test, complete pre-licensure education courses, and take annual continuing education courses. The SAFE Act also requires all MLOs to submit fingerprints to the Nationwide Mortgage Licensing System (NMLS) for submission to the FBI for a criminal background check and to provide authorization for NMLS to obtain an independent credit report.
This law is enforced among all lender "types" from big banks, to mortgage-specific lenders, to bankers, brokers, and credit unions. The final date for compliance as of this writing is December 31, 2011. The launch of the NMLS means consumer confidence and protection should be elevated as now every MLO must be licensed. But, alas, anyone can pass a test at some point in their lives, right? So is NMLS the answer and protection that the MLO you have chosen can do the job? I say no. One cannot rely solely on the law. Choosing a Loan Officer is still best done the way it has always best been done, through recommendations by your family, friends, co-workers, or best of all, your REALTOR®.
The SAFE Act is a good law; licensing and accountability are now in place which is good for the housing industry and consumers. Stay tuned for more news about mortgages and the lending industry. If you have any questions I can be reached at mmcdermott@mhlcu.com or 713-503-6086.
Posted by Guest Contributor, Mike McDermott
mmcdermott@mhlcu.com 713-503-6086
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