After the real estate crash a few years ago, it was revealed that many mortgage professionals weren’t behaving professionally. They were acting with disregard to professional ethics or operating without a valid and up-to-date license in their state. The mortgage boom that preceded the crash offered such amazing profits that many questionable individuals were drawn into the industry to make a fast buck — on both sides of the equation.
As a result, many states have toughened their requirements for mortgage loan officers. Part of this was dictated by the SAFE Act which governs mortgage licensing and requires a national registry of mortgage professionals and companies. However, many states took it upon themselves to go beyond the federal requirements to protect the interests of home buyers in their state. There are now tough standards for training, such as for Pennsylvania mortgage continuing education , as well as regular background and credit checks as well as other requirements in order to renew a license as well as obtain an initial license.
In general these requirements will apply to mortgage brokers and mortgage loan originators, no matter what state they are in. Usually individuals who have clerical or support jobs and are not responsible for loan origination, negotiation, or similar activities, are exempt from licensing requirements. Mortgage companies are required to check the licenses of all employees and borrowers would do well to check with their state banking authority or the new national registry to verify those licenses themselves.