Origination News Feature Story

SAFE Shifts State Education Foundations' Efforts

By Brad Finkelstein

NEW YORK-Even before the passage of the SAFE Act, there were a number of states that had some sort of prelicensing and/or continuing education requirement for mortgage originators.

In response, a number of state trade organizations had decided to become providers of education themselves, including Florida and Illinois.

Now the requirements of the SAFE Act are forcing these organizations to refocus their efforts. Course offerings are now required to be approved by the National Mortgage Licensing System. These groups are moving away from state-specific offerings to ones with a more national focus.

The Florida Association of Mortgage Brokers Education Foundation was one of the first to become an approved NMLS course provider, said Valerie Saunders, president of FAMB and vice president of FAMBEF.

All of the group's offerings are classroom courses. However, to get approvals for an individual course from NMLS can be costly, especially for a nonprofit organization like FAMBEF. The cost is $300 per submission and the renewal is $200 annually.

Therefore, Ms. Saunders said, FAMBEF is being selective on what courses it is submitting to NMLS rather than submitting its whole library of offerings.

Many courses will be given as "career enrichment" offerings as they still contain valuable information, even though they are not being submitted, she said.

In fall 2008, the Illinois Association of Mortgage Professionals changed the name of its education foundation (which like Florida had mirrored the trade group's name) to the more generic Mortgage Education Foundation. The new name, it said, reflected the expanding and diverse industry and consumer education offerings within all sectors of the mortgage and real estate finance industry.

Marve Stockert, executive director of both IAMP and MEF, said MEF has two courses already approved by NMLS, with seven others in the process. All of these are for prelicensing education.

Starting Jan. 1, 2010, all education needs to be taken through approved providers and courses. In Illinois, if a loan officer completes his prelicensing re-education requirements prior to Dec. 31, 2009, they have met the new requirements.

However, he pointed out, if a person has not completed the course work by then, the SAFE Act requires that person to restart the whole process from scratch.

One thing the NMLS process has brought to industry education requirements is some uniformity. Before, Mr. Stockert noted, the system was fragmented. Now a course taken in Illinois, Florida or elsewhere, because it is NMLS approved, meets the education requirements in another state.

However, the SAFE Act only set minimum standards. Some states go beyond what the federal act mandates for prelicensing and continuing education.

There are both state tests and a national test, he said, and even if an individual takes the national test, they still must take the individual state test for any state they plan to work in.

Meanwhile, the Mortgage Bankers Association of New Jersey said that the company it has selected to provide the required prelicensing and continuing education under the SAFE Act and New Jersey Residential Mortgage Lending Act has been approved by the NMLS.

The Academy for Professional Mortgage Originator Licensing LLC was approved on Aug. 17 and will be providing the required courses, including the state-specific portion, once the courses are also approved by NMLS, MBA of New Jersey said.

The dates, time and cost of the courses will be announced following their approval.