Mortgage servicers and mortgage lenders are already regulated in most states, mortgage loan officers have no such regulations which could allow for entry of unscrupulous loan operators who act illegally or may have criminal backgrounds.

Mortgage education would include background checks and continuing education as part of any new laws passed concerning mortgage brokers and mortgage loan officers in those states that do not have laws already in place concerning their mortgage loan officers.  There is a national loan officers licensing law which debuted July 1 of this year and is helping to keep the mortgage loan officers on the straight and narrow.

The idea behind licensing mortgage loan officers is to make sure people on the front lines, those people dealing with the customers, are giving them the straight information they require on the variety of programs and products available to them.  This helps make sure they have a fiduciary responsibility to help the consumer.

In addition to mortgage education programs and schools online, there are countless numbers of mortgage exam prep websites that will help those individuals seeking a new career in the mortgage lending business.  Just as with a lawyer or a beautician, a mortgage lender needs to be licensed to ‘practice’ or perform the duties of a mortgage lender.

In order to keep loan officers regulated, the law requires that every state have a system in place that meets certain national minimum standards and national definitions that, among other things, includes: testing and pre-licensing education; continuing education; credit background checks and criminal history background checks.

The reason for the criminal background checks and credit checks for the loan officers is so that unscrupulous or predatory lenders do not ‘slip through the cracks’ and start making loans that people cannot afford which is what started the housing crisis in the first place.

There is also the NMLS education – National Mortgage Licensing System – which provides state-banking regulators a single database to track professionals with licenses to sell mortgages.  NMLS is managed by the Conference of State Bank Supervisors and the American Association of a Residential Mortgage Regulators.