The Nationwide Mortgage Licensing System (NMLS) Consumer Access website will launch on January 25, 2010, giving borrowers access to their mortgage originators’ licensing and employment records. The fully-searchable list will be updated nightly and feature information on mortgage originators such as:
- whether a mortgage originator is licensed, and in what states;
- the company or companies the mortgage originator is currently working with and has worked with in the past;
- a 10-year employment history;
- whether a mortgage originator is engaged in other lines of business;
- the mortgage originator’s aliases, if any;
- the mortgage originator’s criminal record, if any; and
- any disciplinary actions taken against the mortgage originator.
Some features of the list (such as the records of disciplinary action) will not be available immediately upon launch. All states must comply with the NMLS and require registration of mortgage originators by July 31, 2010. Initially, only state-regulated mortgage originators will be included on the list, with federally-regulated mortgage originators (namely the banks that funded the mortgage crisis) to follow.
The NMLS Consumer Access website is another offshoot of the larger regulatory scheme known as the Secure and Fair Enforcement (SAFE) Mortgage Licensing Act.
first tuesday take: Mortgage originators, who under this same SAFE Act, will be subject to rigorous educational standards on state (mortgage originator endorsement) and federal levels (registration), will now also be subject to intense scrutiny by the public. Without question, these regulations will drive many mortgage loan brokers who handled Real Estate Settlement Procedures Act (RESPA)-type consumer loans secured by one-to-four residential units out of the business of negotiating and securing those loans.
While the goal of consumer protection should always be at the fore of a good mortgage originator’s modus operandi, this new slough of legislation against mortgage originators — and the noticeable delay in including banks as the federally-regulated mortgage originators — plays that same old game of passing the blame from the larger players (large banks, lenders and Wall Street operators) to the smaller ones, namely the real estate brokers and agents that were vigorously solicited by the lenders. It’s just easier for the government to use smaller, more easily-regulated groups to push the illusion of their effectiveness. Lending does not seem to be a nice business to be in these days, if you are on the brokers’ side of the process.
All this could be the banker’s best way to keep depositor’s funds in their cheap savings accounts. All this heavy-handed restriction on loan broker activity has hugely reduced a depositor’s access to a mortgage loan broker to place their funds into trust deed investments. The ability of depositors to disintermediate funds out of the deposit accounts into private lending on real estate would be competition costly to the banks. One more financial outlet closed in favor of banker’s profits.
Re: NMLS Consumer Access website may help protect mortgage shoppers from unscrupulous loan originators from the Los Angeles Times