Obtaining a mortgage loan officer license plays an essential role in a career in the mortgage industry. Loan Officers that obtain an MLO can easily leverage their career significantly more than others. This guide is a step-by-step guide for getting your MLO license, explaining all information about the position and why it is relevant as well as covering the educational and regulatory requirements.
Understanding the Role of a Mortgage Loan Officer
A Mortgage Loan Officer is a financial expert that provides the necessary help and information to people and businesses that are looking to apply for a loan through financial institutions, lenders, banks and credit unions. Loan Officers gather details from their clients, provide the relevant material on the financial standing of the applicants, and help the clients/customers fill in important documents and forms. MLOs can find employment with any banking facilities, credit unions, mortgage, or other firms of a similar nature.
Why is the MLO License important in the Mortgage Industry?
Licensing creates functions that guarantee the fact that mortgage loan officers have adequate skills and ethical qualities for working with clients. It also protects consumers and ensures their Mortgage Loan Officer always gives regulations and high-quality practices as well as supports them effectively.
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7 Steps to Obtaining a Mortgage Loan Officer License
To obtain a mortgage loan officer license, the following procedures are made:
1. Meet Basic Requirements
Before you can get a Mortgage Loan Officer License, you must meet certain basic NMLS license requirements:
- Age: You must be 18 years of age or older
- Education: A Mortgage Loan Officer needs at least a high school diploma education, moreover the candidates should have a GED certificate. The formal education requirement entails having a college degree; however, any prior experience in the domain of finance, business, or economics would be of value for the execution of the career.
2. Complete Pre-Licensing Education
According to the provisions of the SAFE Act – Secure and Fair Enforcement for Mortgage Licensing Act all the individuals aiming at practicing as MLOs are supposed to undertake at least 20 hours of pre-licensing training. This education must be provided by an approved institution and cover the following topics
- The federal law and regulations (3 hours)
- Ethics, including fraud, consumer protection, and fair lending will be covered, (3 hours)
- Non-traditional mortgage lending (2 hours)
- Electives that include other topics dealing with mortgages (12 hours).
3. Pass the Nationwide Multistate Licensing System (NMLS) Exam
After completing the pre-licensing education, you have to take the NMLS exam commonly referred to as the SAFE MLO Test. The information on the SAFE MLO Test consists of two components:
- National Component: Deals with Federal Mortgage Laws, General Mortgage Information, Mortgage Loan Origination, and Mortgage Loan Origination Activities and Ethics.
- State Component: Explains the pertinent state laws and regulations if they are available.
The passing scale is often 75% or higher.
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4. Submit a Background Check and Credit Check
To protect the Credentials and uprightness of Mortgage loan officers, you would undergo a background check and also a credit check. These steps constitute fingerprinting and a credit check based on your credit history. Certain criminal backgrounds or any major financial problems may disqualify you from obtaining a license.
5. Apply for Your License
The license is obtained after one has passed the NMLS examination and has also undergone the necessary background and credit checks and after this, one can apply for the mortgage loan officer through NMLS license. It consists of forwarding your test scores, the result of your background check, and, if necessary, paying associated fees.
6. Obtain Sponsorship
Most states require that an individual seeking his or her MLO license be affiliated with a mortgage company or a financial firm. This sponsorship is an indication that you will be reporting to an experienced professional and that you will be practicing as per the set standard.
7. Maintain Your License
Once you have been issued with the license, you are supposed to take continuing education (CE) to renew it. The SAFE Act requires MLOs to complete at least 8 hours of CE annually, including:
- Federal law and regulations are also very significant (3 hours).
- Fraud and other ethical issues as related to the consumer and fair lending (2 hours)
- We also have the non-traditional mortgage lending (2 hours)
- A set of electives to be taught about other topics related to mortgage (1 hour)
→ Learn more: how much does a loan officer make on a mortgage?
Conclusion
Any job position in mortgage requires one to have a mortgage loan officer license. This guide explains everything from how to obtain your mortgage loan officer license and how it will help you qualify your clients for a mortgage loan.
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