National Licensing

National Licensing

January 6, 2010

For years I have heard complaints about the lack of a level playing field between mortgage brokers and banks. NMLS is supposed to help close the gap, but I still hear complaints about how good banks have it compared to brokers. Banks have exemptions from state licenses, only need to register, yada,yada,yada. Let's discuss what banks have to go through in order to receive these benefits compared to their broker brethren. To work for a bank usually one must pass a background check, which includes a credit check. Bankers believe that a 720 score is ok, but could be better. All bank employees must take and pass annual training on subjects like the Bank Secrecy Act, Patriot Act, Graham, Leach, Bliley Act. Information security is also taught. Bankers cannot (should not) be working on a Point file on a WiFi connection at Starbucks. Banks by law must keep sufficient levels of capital on hand to cover potential losses, or they can be shut down Regions/AmTrust). Banks must produce accurate and timely financial reports (monthly, quarterly and Yearly) that do not include cars and boats and shotguns and condo's in Maui (yes I have seen them all on broker financials). Annual Audits are a blast, once the team of auditors is finished going over your mortgage departments policies and procedures, QC Plan, and disaster recovery plans, made recommendations of how you can do a better job of all that; the auditors auditor comes in to verify that everything the auditor did was done correctly, they audit the financials too. Then comes the alphabet soup, the OCC, OTS, FDIC. These are the tough audits. Imagine 3-4 people coming into your office, all of them with the FBI on speed dial and the authority to close, seize or freeze any and all documents, funds or anything else they find that is not on the up and up. When they are done going over loan files and everything else they want to examine, they make suggestions on how you can do a better job, then come back a few weeks later to make sure you made those changes. These are just a few of the daily hurdles depositories go through. Do bankers really have it that easy?