OLYMPIA – The Department of Financial Institutions (DFI) is pleased to announce the successful implementation of the new mortgage licensing requirements as required by the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the “S.A.F.E. Act”).
“Many of the bad loans that led to the economic crisis in the housing market were made by incompetent or dishonest loan originators,” DFI Director of Consumer Services Deborah Bortner explained. “Without stronger regulation, consumers were targets of unscrupulous loan originators.”
In order to better protect consumers, Congress passed the S.A.F.E. Act mandating that all mortgage loan originators, except those who work directly for banks or credit unions, meet certain professional criteria by July 1, 2010 and be licensed through the Nationwide Mortgage Licensing System and Registry (NMLS) in order to continue making or brokering loans.
Under the S.A.F.E. Act, mortgage loan originators must meet numerous professional requirements including:
- 20 hours of pre-licensure education;
- At least 8 hours of professional education each year;
- Passage of a state and a federal test covering federal and state law and ethics;
- A criminal background check; and
- The maintenance of a surety bond that protects consumers from fraud.
Since March 1, 2010 the Washington DFI processed more than 2,800 applications from individuals and granted 2,163 licenses to those applicants who met the new standards.
“Through NMLS and the requirements imposed by the S.A.F.E. Act, state supervision of the mortgage industry has been standardized across the nation, the professionalism of the mortgage industry has been improved, and perhaps most importantly, consumer protections have been enhanced,” DFI Director Scott Jarvis said. “Consumers rest a little easier knowing Washington’s licensed mortgage loan originators have met stringent requirements.”
The DFI recommends consumers always check the licensing status of the mortgage loan originator with whom they do business to ensure they can legally assist with the transaction. A consumer can check the license status of any loan originator by looking up their loan originator on the NMLS Consumer Access where they can confirm that the mortgage company or mortgage professional with whom they wish to conduct business is licensed and where they are licensed. By doing so, it confirms whether they have met the new licensing requirements. By going to either www.dfi.wa.gov and clicking on the NMLS Consumer Access button or going directly to www.nmlsconsumeraccess.org, a consumer can search for his or her mortgage professional free of charge.
In addition to individual mortgage professionals, the DFI supervises and licenses mortgage lenders and mortgage broker companies which can also be viewed through the NMLS Consumer Access. If a consumer has complaints against their mortgage loan originator or the companies they work for, they can file a complaint online, they can send the complaint to DFI Consumer Services, P.O. Box 41200, Olympia, WA, 98501 or they can call us at 1-800-RING-DFI (746-4334).