The bill would ease employment transition for mortgage loan originators who move between bank and non-bank entities
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The US House Committee on Financial Services has approved a bill that amends licensing rules for loan originations among a set of 12 other bills.
The bill, HR 2948, would amend the SAFE Mortgage Licensing Act of 2008 to allow loan originators to have a temporary license when they transition between employers. It was approved 60-0.
Under the bill, registered loan originators would be provided temporary loan-origination authority when they move from a financial institution to a state-licensed non-bank originator or interstate to a state-licensed loan originator in another state.
Under current law, originators employed by non-bank lenders are required to be licensed and are also registered in the National Mortgage Licensing System and Registry (NMLS). Originators with federally-insured depositories or their affiliates, on the other hand, must only be registered in the NMLS.
With the amendment, states would be required to issue transitional licenses to eligible individuals, who would be able to continue originating loans for 120 days after being employed by a state-licensed non-depository entity. Similarly, a state-licensed loan originator in one state who takes a similar position in another state would have a 120-day grace period to obtain a license in the new state.
The bill was introduced by Rep. Steve Stivers (R-Ohio).
“An unintentional consequence of the current law is inhibiting job mobility and putting independent mortgage lenders at a considerable disadvantage in recruiting talented individuals,” Stivers said when the bill was introduced in June. “Rather than leaving a job on a Friday and starting a new job on a Monday, as most of us do, a loan officer who moves from a federally-insured institution to a non-bank lender must sit on their hands for weeks, even months, while they meet the SAFE Act’s licensing and testing requirements. This is despite the fact that they have already been employed and registered as a loan officer. This is simply unfair.”
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Mortgage customers are less satisfied with originators
The bill, HR 2948, would amend the SAFE Mortgage Licensing Act of 2008 to allow loan originators to have a temporary license when they transition between employers. It was approved 60-0.
Under the bill, registered loan originators would be provided temporary loan-origination authority when they move from a financial institution to a state-licensed non-bank originator or interstate to a state-licensed loan originator in another state.
Under current law, originators employed by non-bank lenders are required to be licensed and are also registered in the National Mortgage Licensing System and Registry (NMLS). Originators with federally-insured depositories or their affiliates, on the other hand, must only be registered in the NMLS.
With the amendment, states would be required to issue transitional licenses to eligible individuals, who would be able to continue originating loans for 120 days after being employed by a state-licensed non-depository entity. Similarly, a state-licensed loan originator in one state who takes a similar position in another state would have a 120-day grace period to obtain a license in the new state.
The bill was introduced by Rep. Steve Stivers (R-Ohio).
“An unintentional consequence of the current law is inhibiting job mobility and putting independent mortgage lenders at a considerable disadvantage in recruiting talented individuals,” Stivers said when the bill was introduced in June. “Rather than leaving a job on a Friday and starting a new job on a Monday, as most of us do, a loan officer who moves from a federally-insured institution to a non-bank lender must sit on their hands for weeks, even months, while they meet the SAFE Act’s licensing and testing requirements. This is despite the fact that they have already been employed and registered as a loan officer. This is simply unfair.”
Related stories:
Tips for exceptional client service
Mortgage customers are less satisfied with originators
