Cornerstone Home Lending LOs no longer need to be licensed

Loan officers at Cornerstone Home Lending no longer need to hold individual state licenses following the completion of its purchase of Roscoe State Bank in Texas, the company said.

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008, also known as the SAFE Act, created dual standards for working loan officers based on who their employer is. Only those who work for independent mortgage bankers and mortgage brokers need to have state licenses while also being registered in the Nationwide Multi-State Licensing System.

Loan officers at depositories must only be registered in the NMLS. As a result, many are not licensed or let their license lapse and need to obtain transitional licensing in order to work right away at a non-depository.

But some, including Community Home Lenders of America Executive Director Scott Olson, have called on the Consumer Financial Protection Bureau to end the dual status and require all LOs to be licensed, no matter who they work for.

Houston-based Cornerstone, which created Cornerstone Capital Bank SSB as a result of the Roscoe purchase, is now touting its LOs can lend in 37 states without them having to be licensed in those states.

The company itself now only has four active licenses in three states, according to its NMLS listing.

"After we acquired the Roscoe State Bank and formed Cornerstone Capital Bank SSB in October 2022, our skilled teams swiftly enhanced internal technology to promote production growth across the country for our loan officers through expanded lending areas, specialty portfolio loan products, training, and other services," said Adam Laird, CHL's chief executive officer, in a press release. "We constantly focus on investing in new, innovative ways to support the growth of our loan officers and the success of our business partners."

Last April, after it entered into the agreement to acquire Roscoe State Bank but was still waiting regulatory approval for the transaction, Cornerstone announced plans to move its servicing function in-house. Laird touted LOs no longer needing to be licensed and in-house servicing, as well as the commercial banking products and services it could now offer "to create even more advantages and opportunities for our sales teams to serve our clients."