The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) established requirements for the licensing and/or registration of all Mortgage Loan Originators (MLOs). In order to work as a mortgage loan originator, which is also sometimes referred to as a mortgage loan officer, you must have an MLO license.
In addition, as an MLO you must fulfill a number of MLO license requirements in order to renew your license. For example, the Nationwide Multistate Licensing System and Registry lists the state-specific education requirements for Pre-Licensure Education and Continuing Education; as a condition for license renewal, an MLO must complete at least eight hours of continuing education in the same year in which he or she is placed in an approved license status by a state agency.
The various requirements for MLO renewal, including deadlines and pre-licensing education requirements, vary by state. In order to make the process of MLO renewal as easy and stress-free as possible, we did some research and have assembled information about several key states for quick and easy reference.
Way Out West in California, Oregon and Washington
New state-licensed MLOs are typically required to complete around 20 hours of NMLS-approved education, but it does seem to vary a bit by state in terms of what is required.
For example, in California, this education needs to include three hours of Federal Law, three hours of ethics — including fraud, consumer protection and fair lending issues — two hours of non-traditional mortgage lending, and 12 hours of “undefined education,” otherwise known as “electives.”
Oregon Pre-Licensure Education Requirements are similar to California’s in that new state-licensed MLOs need three hours of Federal Law and three hours of Ethics and two hours of non-traditional mortgage lending. But in the Beaver State, you must have four hours of Oregon law and eight hours of electives. One state above in Washington, it’s a bit higher at 22 hours. The class hours are the same as California and Oregon for most courses, but in Washington you need 10 hours of electives and four hours of Washington law.
Continuing Education Deadlines Out West
For those who are seeking NMLS approved continuing education (CE) in 2018, the deadline to complete their CE in California and Oregon is December 31, 2018 and in Washington it is December 15, 2018. In all three states, MLOs are strongly encouraged not to wait until the last minute to try to complete their CE — they should allow at least seven days for a course to show as finished.
Meanwhile, in the Midwest
In Illinois, new state-licensed MLOs must complete 20 hours of NMLS-approved education that matches the requirements of California. Illinois does not have a requirement for instruction on state-specific law. In Michigan, it is the same as Illinois for the basics, but MLOs must also take two hours of instruction on state-specific law. This can be satisfied by taking a Michigan comprehensive course or a state-specific elective course.
Continuing Education Deadlines in the Midwest
The deadline to complete CE in Illinois is December 31, 2018 — but MLOs in Illinois may not submit their application to renew their license if they have not completed their CE, so as stated above, it is wise to finish the CE well in advance. The same deadlines are true for Michigan. Do not assume the deadline is always December 31 in the Midwest — in the case of Iowa and Kansas it is December 1, so checking your state’s requirements is crucial.
What About Down South?
Two busy states for mortgage lenders, Florida and Texas, require the familiar 20 hours of NMLS-approved education. Florida does have a requirement for two hours of instruction on state-specific law, which may be satisfied by either taking a Florida comprehensive course or a state-specific elective course. This is in addition to the three hours of Federal law, three hours of ethics, two hours of non-traditional mortgage lending, and 10 hours of electives. Texas is almost the same, but since it does not require state-specific courses, the number of electives is 12.
Continuing Education Deadlines in the South
The deadline to complete CE in Florida and Texas both is December 31, 2018 — but MLOs in both states may not submit their application to renew their license if they have not completed their CE. So, as stated above, it is wise to finish the CE at well in advance. It is important to note that not all states follow the December 31 deadline. In the case of West Virginia, it is significantly earlier at November 1, 2018.
In Pennsylvania, new state-licensed MLOs must do the familiar 20 hours of NMLS-approved education with the usual three-three-two hour breakdown of the same classes, as well as nine hours of electives and three hours of Pennsylvania law. New York has the same hourly breakdown of requirements; the state-specific law can be satisfied by either taking a NY comprehensive course of state-specific elective course.
Continuing Education Deadlines in the East
Both NY and PA list December 31, 2018 as the deadlines to complete CE. As is the case with all states, it is best to finish CE well ahead of time to give the instructors at least a week to list the courses as completed. Please note, while December 31 is a common deadline, some states set it earlier. This is true for Vermont and Delaware both, where CE must be completed by December 1, 2018 and in the District of Columbia it is November 1, 2018.
Additional Requirements for MLOs
SAFE MLO Test
Every Loan Originator must take and pass the SAFE MLO test in order to satisfy the SAFE test requirements of their state. The Prometrics site is a solid resource with information about enrolling for the test as well as test policies and other tips.
Criminal Background Checks
According to the Nationwide Multistate Licensing System & Registry, every MLO, whether they are state-licensed or federally registered, is required to complete a criminal background check (CBC) in NMLS. This CBC is required for submission of the application, so it is advised that all new MLOs, and those who are renewing their license, should start the CBC process as early as possible.
MLO Testing and DataTree
As you read through the information above, you probably noticed that, while there are similarities in requirements for all states, there are some key differences that are important to be aware of. The aforementioned online document, State-Specific Education Requirements: PE and CE by the NMLS, is a valuable resource that includes the specific instructions for each state. In conjunction with this article, you may want to bookmark that site.
At DataTree, we are committed to helping mortgage industry professionals. We hope this synopsis of several key states is helpful to MLOs interested in getting or renewing their license in 2018.