The individuals who offer personel loan products are now subject to new regulations. Agents that offered both large and small loans that were not up to snuff are the target of these regulations. These licensing laws were passed in 2006 in New York, and similar ones were passed federally in 2008.
New York state loans requiring licensing
The newest regulations in New York state are intended to regulate not money advance lenders that offer mortgages, but their agents. As of July 31, any mortgage loan officer who wants to work in New York State must have a license. In order to get this license, an agent must complete a 20 hour training course. Applicants also must pass tests, criminal background checks and financial background checks. Around the country, similar laws are likely to be taking effect within the next few years.
Loans offered by bad employees limited
The New York law and also the Secure and Fair Enforcement for Mortgage Licensing federal law passed in 2008 address a specific problem. The economic recession came about, in part, because of money advance products offered by a certain subset of people. While mortgage businesses were licensed, the lenders who worked at them weren’t required to be. Many loan officers who made no credit loans would jump from job to job after fired for making bad loans.These licenses will help states keep track of the mortgage lenders working in their state.
Licensing requirements relatively light
By addressing issues within the mortgage business, the new law does help, but some are worried it might not be enough. Most say that the required 20 hours of training simply isn’t really enough. Most state licenses require at least 75 hours of specialized training. Either way, the Nationwide Mortgage Licensing System and Registry is now providing a search for borrowers to identify whether they’re working with a licensed mortgage lender.
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