In many states, unsecured loan products are being subjected to new regulations, mostly based around who offers them. Unscrupulous agents that offered small loans and large loans to customers are the intended target. These licensing laws were passed in 2006 in New York, and comparable ones were passed federally in 2008.
Licensing loan officers in New York
The New York state regulations are not intended for cash advance lenders that offer mortgages, but for their employees that really offer mortgages. A license is necessary for any individual who wants to work in New York State after July 31, 2010. Getting this license demands a 20 hour course in responsible lending. Financial, criminal, and knowledge tests are also required for the license. Within the next few years, you will find comparable laws that will go into effect.
Loans offered by bad employees limited
The Secure and Fair Enforcement for Mortgage Licensing law addresses one very specific problem. Many of the bad loans and fast money advance products that contributed to the economic downfall came from a unique subset of lenders. The employees that work for lenders that were licensed did not have to have their own certification. Mortgage loan officers who were known for making no credit loans or bad loans could jump from job to job.By maintaining a record on the lender’s license, states can be able to keep closer tabs.
Light licensing requirements
While the reform that has been implemented as of July 31 addresses many issues in the mortgage business, some are questioning the needs. Numerous licensed professionals say that 20 hours is not enough training. In most states, licensed professions require a minimum of 75 hours or more of training. Make sure that your lender has a license to offer mortgages by searching for them in the Nationwide Mortgage Licensing System and Registry online .
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