HUNT VALLEY, MD-In some states, the changes brought on by the SAFE Act are "a complete fundamental change" for the mortgage originator community, the head of a mortgage education and loan officer training provider declared.Christopher Nickerson is the co-founder and chief executive of TrainingPro here, and both a member of the Nationwide Mortgage Licensing System Course Provider Working Group Committee and a volunteer for the NMLS Course Application Pilot Process.
At first, the industry was slow to adapt to the changes, but it is picking up, as various deadline dates near. Even though the changes that established both prelicensing and continuing education requirements have been around for at least a year, and 49 states and the District of Columbia have passed legislation that enacted SAFE in their jurisdictions (only Minnesota hasn't), there were still a fair number of originators caught by surprise.
"The direct feedback I am getting from some originators is that these changes are happening very fast," Mr. Nickerson said, adding TrainingPro has been providing education services for over 10 years. Any time new regulations or legislation gets enacted, normally time is allowed for a transition.
But the SAFE Act was passed by Congress quickly and the implementation by the states has been quick as well. He thinks that is where a lot of the surprise is coming from.
"All in all, there is a mixture of excitement, apprehension and ultimately confusion because any time you transition from a state-run licensing and education requirement to a new federal standard" you deal with differences between the old set of rules and the new set of rules, Mr. Nickerson said.
He believes originators in states, which lacked education requirements prior to SAFE, might have an easier transition to the new standards. There were only a few states that met SAFE standards for prelicensing and continuing education.
There is some confusion among originators in such areas as whether having years of experience in the business exempts one from taking the national examination.
Furthermore, even though SAFE sets a minimum level of education, states can set a tougher standard. For example, Utah, he pointed out, has 60 hours of prelicensing education and North Carolina requires 24 hours.
But for brokers who are looking to do business in more than one state, there is a silver lining. Once NMLS approves a course, the course is acceptable in all 50 states and can be used to meet the education requirements in multiple jurisdictions.
There are three formats for the delivery of pre-education - traditional classroom, a "classroom equivalent," which Mr. Nickerson described as similar to a webinar, and "instructor-led online," which he said is similar to an online college course with interaction between the instructor and student and interaction between students.
For continuing education, a self-paced online course format is permitted in addition to the three above formats.
However, some states might not accept some of the delivery methods. For example, North Carolina does not accept instructor-led online.
Each state has different rollout deadlines for compliance with the SAFE Act and originators need to check with their regulators to make certain they are in compliance, not just with the education rules but other requirements including NMLS registration.
If there is one message to get out about the new rules to originators, he said, it is to be proactive about the process, especially with getting registered on NMLS. What scares him is if people wait until the deadline to start meeting the standards. Testing facilities have limited number of seats and an originator might not be able to get in. As a result they could end up being out of compliance and out of business.
