I was reading Banker & Tradesman and came across an interesting article. It has to do with the professionalism and knowledge of mortgage loan originators. As you might imagine, this affects my business, so it piqued my interest.
It seems that something called the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) was passed by Congress in July 2008 and required states to pass legislation requiring the licensure of mortgage loan originators. Testing began in summer 2009 (last date to take the test July 2010). Now that results are starting to trickle in, it appears a substantial number of mortgage brokers have a lot more homework to do to meet standards. Some 10,000 people have taken the tests and more than 30% failed the federal portion. The number of failures on the state portions was slightly less – 27%. All in all, I would say, that’s a pretty sad state of affairs.
The national test covers general mortgage knowledge, loan origination, federal law, and ethics. The Massachusetts state section of the test is similar, but with a focus on Massachusetts laws, and requires an additional three hours of training.
There have been many complaints (from those taking the test) which seem to center on the regulation portions of the test. It’s not enough to know whether something’s ethical or unethical, and what information must be given to clients, and in what form; many of the questions, mind you, ask test-takers to pick out the particular statutes which describe these responsibilities. (Oh my, that sounds very difficult).
As stated, Banker & Tradesman wrote an article on the new testing reqirements for our local mortgage originators. Here’s an excerpt:
With twenty hours of classes required in addition to the test, and a 30-day lag time before it can be re-taken if the broker fails on the first go-round, many are gearing up early to get the exam under their belts – and they’re finding it a struggle.
Bill Poliquan, a 16-year mortgage industry veteran with Norton’s Bay State Mortgage Corp., just took the test last week – for the second time.
“First time I failed by one point,” Poliquan said. “Got a 74, you need a 75. It’s definitely a challenge.”
File Under: “Got a 74 need a 75…” Yep, that pretty much sums it up.