Thursday, December 9, 2010

New Licensing Regulations

On January 1, 2011 - just a few weeks from now - all mortgage brokers in Colorado must be licensed by the State and registered with the Nationwide Mortgage Licensing System (NMLS). At the moment, thousands of Colorado mortgage brokers have chosen to either ignore the new regulations, or have failed to complete the paperwork correctly or pay the required fees.

On January 1, any mortgage broker who is not licensed by Colorado or registered with NMLS will not be allowed to originate loans in Colorado. However, no one will know that a broker is not licensed and registered until the loans they have sold go to underwriting. That means many deals may fall apart.

Here's how to protect yourself and your clients:
  • If you are the selling agent, ask the mortgage broker who is working with your buyers if they are licensed and registered. If they are, they will have a Colorado Mortgage Loan Originator License number and an NMLS registration number.
  • If you are the listing agent, you should also ask the mortgage broker. Don't assume that the selling agent has done it for you. If they haven't, and the mortgage broker is not licensed and registered, your deal will fall apart.

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