Time Running Out for Mortgage Brokers' Applications
There are about 30,000 licensed mortgage brokers in the state of Florida who haven't renewed their license applications, and time is running out. If mortgage professionals don't apply by Dec. 31 they cannot process loans or do business after that date until their license is approved by the state Office of Financial Regulation, a process that could take three months or more.
A recent federal dictate requiring more uniformity between states in issuing licenses to mortgage brokers and seeking greater accountability means brokers must reapply under the new Nationwide Mortgage Licensing System. The new applications will be reviewed more rigorously and applicants must pass a background check, credit report and be fingerprinted. The law also requires annual renewal; state statutesrequired renewal only once every two years.
"Previous to that (law), you could have your license revoked in Florida and then go to Virginia and get a license there," said OFR spokesperson Flora Beal.
According to the OFR, there are 42,666 licensed mortgage brokers in the state. As of Monday, there were about 12,000 mortgage broker, or loan originator, applications received by the OFR. As of Dec. 1, 995 out of 6,967 licensed mortgage companies have sent applications and only 727 out of 3,116 mortgage company branches have reapplied.
It's not unusual for brokers to wait until the last minute to reapply. Beal said her office received 7,000 applications on the last day last year. This year, however, with the additional federal requirements and more stringent background checks, the OFR is encouraging brokers to get their applications in early.
"The longer you wait the more risk you take, and the last thing we want to see is Floridians who are unable to legally continue working in the mortgage industry just because they didn't get their applications in on time," said OFR Commissioner Tom Cardwell.
Brokers who originate loans without a viable license can face fines of $1,000 per day up to $25,000. Those who modify loans without a valid license can face a fine of up to $5,000 per offense or up to five years in jail.
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