An interesting industry side note has the Community Home Lenders Association (CHLA) providing the CFPB with a written request to mandate bank employed mortgage loan originators be required to meet the same basic testing and continuing education requirements that licensed mortgage loan originators are mandated to in order to do the same job.

Currently mortgage loan originators that are not employed by a bank are required to comply with the following strict criteria in order to be licensed to do their job:

  1. Pass the SAFE Act test
  2. Undergo a background and credit check prior to employment and periodically for annual renewal of their license
  3. Complete at least 8 hours of continuing education each year

This letter states, “We believe that it is important both for the integrity of the profession of mortgage originators and for the consumers that they serve to have high uniform standards that apply to all mortgage originators, regardless of whom they work for…” This same letter goes on to identify that there are 1,415 registered mortgage originators that are currently working at banks and other depository institutions, who failed and have not passed to date the SAFE Act test and that these originators should not be considered to be “qualified” originators. This letter goes on to point out that if registered bank originators were forced to take the SAFE Act exam, anywhere from 36,000 to 120,000 of them may fail.

It is interesting to note that all other industry professionals including real estate brokers, appraisers, home inspectors and non-bank mortgage loan originators are all subject to licensing, testing and continuing education requirements, making bank employed mortgage loan originators the exception to the rule.

If you have any thoughts or comments on this topic, please post below.

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