Loan Originators currently employed by correspondent lenders and mortgage lenders are currently exempt from licensure; however, the exemption is being repealed. When will these employees need to be licensed as loan originators?
Answer: The requirement for new loan originator license for individuals does not become effective until October 1, 2010. However, the Office is strongly recommending that employees of lenders who desire to continue to work uninterrupted seek licensure as a mortgage broker as soon as possible for a number of reasons. First, the law allows applicants already licensed with the Office to file the loan originator application until December 31, 2010 and continue operating while the Office processes and considers the application, even if the final determination on the application does not occur until some time in 2011. Therefore, employees of lenders that obtain a mortgage broker license will have a grace period during which they can continue to work.
Second, the Nationwide Mortgage Licensing System (NMLS) will not accept Florida loan originator applications until October 1, 2010, so it will not be possible for individuals to apply for a loan originator license before that date. Under normal circumstances, the processing of these applications can take a number of months during which time the applicant would not be licensed and could not work in any capacity that would require a loan originator license.
Third, individuals who delay in applying for a mortgage broker license run the risk of not having their application approved before the deadline. While the Office strives to approve or deny each application as quickly as possible, the current application process can take a number of months to
complete. An application that is still in the pipeline as of October 1, 2010 will expire and a new loan originator application will need to be filed through NMLS.
Finally, the Office anticipates a large number of applications after the October 1, 2010 deadline. In addition to non-licensed individuals applying for the first time, all current Chapter 494 licensees will be filing new applications. It will take time to process these applications, which could impact someone’s ability to continue working if they have not been licensed prior to October 1, 2010. In fact, the new law anticipated the additional number of applications that the Office will receive during this transition and extended the deadlines for processing these applications. The Office cannot expedite the processing of applications for unlicensed persons who wait until the new loan originator application becomes available on October 1, 2010, and it could conceivably be well into 2011 before the Office is ready to approve or deny such an application.
