Earlier this month, the House Financial Services Committee approved a bill increasing the mobility of mortgage originators who choose to make a move from a federally regulated bank to nonbank, or to take a new job across state lines.
If passed, the bill would allow bank lending officers to work at an independent mortgage banking or brokerage firm for up to 120 days while they complete the testing and background checks required to obtain a state license. This would make it so that a loan officer can begin working for their new employer during the transition period.
To help ensure that all lending officers could be tracked, Congress passed the Secure and Fair Enforcement Mortgage Licensing Act back in 2008. Bank lending officers must be registered in the National Mortgage Licensing System and Registry, but they do not have to obtain a state license or meet the educational and testing requirements of the SAFE Act.
These exemptions from the SAFE Act make it difficult for bank loan officers to accept a job at nonbank mortgage banking firms. Meanwhile, state licensed loan officers run into similar problems when they take a job in another state. They can’t approve loans until they complete new state’s education and testing requirements.
Congress passed the SAFE Act in 2008 to ensure all lending officers could be tracked and held accountable. Under pressure from the banking industry, lawmakers exempted bank-lending officers from state testing and licensing requirements of the SAFE Act.
Congress has been working on ways to eliminate job barriers for loan originators for several years, according to Rep. Terri Sewell, D-Ala. The 120-day transition period “helps facilitate a loan originator’s job mobility while ensuring state regulators continue to the have ability to protect consumers and market,” Sewell said Wednesday during debate on the bill.
The Senate Banking Committee passed similar SAFE Act amendments last summer as part of a regulatory reform bill. The bill has yet to reach the Senate floor.
Article Credit: www.nationalmortgagenews.com