The SAFE Act mandates that a mortgage loan originator (MLO) must continuously demonstrate the financial responsibility, character and fitness such as to command the confidence of the community. The new standard requires you to submit to a review of your credit. Beginning Oct. 31, 2010, every state licensed MLO shall furnish to the Nationwide Mortgage Licensing System and Registry (NMLS) authorization to obtain a credit report.
Because of declining commissions throughout 2009, the credit rating of many originators has taken a major hit. Some are worried about losing their license upon review of their consumer report. Most state regulators are reluctant to take away someone’s livelihood solely because of credit. If your credit score has dropped, include a letter of explanation with your annual renewal. Provide good reasons why you can still command the confidence of the community and you may get credit when credit is due.
Streamline the process: Know your deadlines
Nov. 1, 2010 credit report functionality was made available through the NMLS. In the first two days, more than 23,000 individuals went into the system and completed the Identity Verification Process (IDV), which authorizes the NMLS to send a credit report to the state regulator on their behalf. With end of year license renewal and the state deadlines for credit authorization approaching, its time to focus on these two obligations.
You can streamline the process by completing both the credit request and annual renewal in one shot. It is critical to check with your individual state to determine both deadlines for license renewal and credit report authorization, then simply combine the process. Go to www.mortgage.nationwidelicensingsystem.org, then go to the “MLO SAFE Requirements Compliance Chart” and read the renewal and credit report authorization deadlines carefully. It is different for every state and it’s your responsibility to know the deadlines.
How to authorize credit
Even if you have previously provided credit authorization to your state, you are required to complete the process again through the NMLS. Go to the NMLS Resource Center and click on “Credit Report” for MLOs. The credit report fee is $15 and the NMLS pulls a single bureau TransUnion Report with Vantage Score. This is a soft pull and will not affect your credit score.
Your company can submit a credit report request on your behalf or you can do it yourself. Either way, you must first complete the IDV process in which you are asked a series of questions regarding your credit history, then you attest to the filing prior to paying for the credit report request.
SAFE Smart credit request
There is no national automated standard or minimum credit score required. The SAFE Act leaves determining the financial responsibility of licensees up to each state regulator. If you are concerned about your credit, go to www.annualcreditreport.com, request a copy of your TransUnion Report, and begin cleaning up any derogatory marks. Remember: Know your deadlines because its time for you to, authorize credit when your credit is due.
Paul Donohue, CRMS is a 23-year industry professional and founder of Abacus Mortgage Training and Education. Paul served on two NMLS working groups, establishing the new national education protocols. Go to AbacusMortgageTraining.com to find out more about your obligations for testing, education and licensure, or call (888) 341-7767.