Mortgage Licensing - What You Need To Know
The number of mortgage companies and websites has grown rapidly over the past few years. And while such a development is great for mortgage-seekers, it is also dangerous to prospective borrowers. Learn how to identify the legitimate from the bad, and protect your identity and privacy in the process.
Separating The Chaff From The Wheat
The increase in mortgage entities is due in no small part to the recent housing boom, which has attracted a lot of new faces to the industry. Unfortunately for the consumer, some of those new arrivals have come with less than honest intentions. They have not come to build a credible reputation, but rather to make a quick buck at any cost.
An increasing number of states have introduced strict lender and broker guidelines. These require prospective mortgage professionals to pass an exam which instills in them a professional ethos, and binds them to a code of conduct. Once an applicant has proved their knowledge and discipline they are then awarded a license to operate in that state. The license is typically valid for one to two years, after which the holder is required to learn any new guidelines and reiterate their commitment to provide good service to the consumer.
Mortgage licensing applies not only to lenders and brokers, but also in many states to lead aggregators. Mortgage lead aggregators are companies who distribute your information to multiple prospective lenders once you’ve submitted a form. This aspect of the mortgage industry has seen tremendous growth in recent years. But again, not all lead aggregators are equal when it comes to service and professionalism. Mortgage licensing can help discern the good aggregators from the bad.
Many states have ways of checking mortgage licenses online, although the sophistication of such tools varies wildly from one state to another. Some states make it quick and easy to confirm the validity of a broker or lender. Others require more time and patience. In most cases finding the tool or list in the first place is tricky, although some mortgage companies include quick links on their licensing pages.
Double Checking The Numbers
When it comes to mortgage licensing, it’s important to not take license numbers at face value. Unfortunately, a small number of unscrupulous individuals steal the license numbers of reputable companies, and then throw them on their hastily-built websites. Unsuspecting consumers who visit such sites see the license numbers and assume they are legitimate. So when you’re shopping online for a mortgage it’s a good idea to double check the license number being listed for your state. Go to your state’s licensing department or division website, or contact them, and ensure that the license does relate to the company you are about to work with.
If you notice a discrepancy, warn your state government. It might be due to a harmless clerical or communication mistake, but it never hurts to alert them. And if you notice a website displaying the license numbers of a different entity don’t hesitate to warn the licensed company.
Conclusion
Like many other sectors, the mortgage industry is filled with both legitimate professionals and crooks. It is a vast sector, which is constantly being shaped by market forces. As a result, mortgage license abuse will always occur.
But licensing does play an important role in helping you know the good from the bad. States and reputable mortgage companies work hard to maintain order and quality via the licensing framework. And by being alert and wielding some common sense, you can use mortgage licenses to protect yourself, and others, from bad experiences.
Andrew Carey works at America’s Lending Partners, a leading online mortgage business that has been providing homeowners and homebuyers with a variety of resources and mortgage services since 1999. For more information please visit: LendingPartners.com
