LANSING – State Representative Shanelle Jackson (D-Detroit) today announced her plan to require all Michigan mortgage loan officers to be licensed, a requirement already in place in more than 20 states.
"Purchasing a new home is an exciting and daunting experience," Jackson said. "With mortgage fraud so prevalent these days, our citizens deserve to know that their mortgage loan officers are licensed by the state. This plan also gives the state some oversight as to who our mortgage officers are."
A mortgage loan officer is a person who makes or offers to make, loans or who acts as an agent for a person to obtain a loan, and who works for a mortgage broker or mortgage lender. The bill does not apply to depository financial institutions that have their own mortgage broker, such as banks or credit unions. Currently, mortgage brokers are registered, mortgage loan officers are not.
Jackson's bill, HB 4596, will require individuals to submit an application to the Department of Labor and Economic Growth and complete 24 hours of courses in specific areas, including state and federal mortgage lending laws, appraisal of real property, mortgage loan application process, underwriting, tax laws, closing, basic financing and ethical responsibility. To renew a license, six hours of continuing education hours must be completed each year.
In addition, new applicants who have been convicted of embezzlement or misappropriation of funds will be ineligible to receive a mortgage loan officer license. Proof of business experience, competence and good moral character may be required before the license can be issued. The bill requires applicants to have the equivalent of three years of full-time experience in the business of mortgage lending or brokering, or a related field.
"In the rapidly growing mortgage industry, unlicensed mortgage loan officers can put our citizens at risk," Jackson said. "Buying a new home is supposed to be a wonderful experience. My plan will ensure that our citizens enjoy purchasing their new homes and are less likely to become victims of mortgage fraud."