OLYMPIA – Only 66 percent of previously licensed mortgage brokers and 42 percent of previously licensed loan originators have fully renewed and been approved to do business in Washington State. The Department of Financial Institutions (DFI) considers these numbers low in light of the numerous reminders and full year of leniency regarding testing, license renewal and continuing education requirements.
“The low number of renewals — compared to the number practicing prior to December 31, 2007 — is a concern,” DFI Director Scott Jarvis said, “particularly in light of the numerous notices issued.”
“We understand that the reduction reflects a dramatic drop in loan activity due to the downturn of the mortgage industry and a number of firms going out of business or dropping their state license,” Jarvis continued, “but the reduction is still a concern.”
In light of the decreased number of licensed loan originators and mortgage brokers, DFI advises consumers to verify that their loan originator and/or mortgage broker is currently licensed to do business within Washington. Consumers can verify licensing either online at http://dfi.wa.gov/cs/list.htm or by calling toll free at 1-877 RING DFI (1.877.746.4334).
DFI urges loan originators and mortgage brokers to take the test and apply for their license immediately or face stiff penalties.
“If loan originators or mortgage brokers transact business during a time when they are not licensed, they will be refunding fees and paying fines,” DFI Consumer Services Director Deb Bortner warned.
DFI records indicate that in 2007, 1,261 mortgage brokers and 13,722 loan originators (agents of mortgage brokers) applied for and received a license after the 2006 passage of legislation requiring loan originator licensing. The Department denied 170 licenses for criminal histories, bad credit, or character and fitness issues.
While 6,139 have passed the competency test, the number of completed renewals is only 5,720. DFI has processed all licenses with complete applications and the Department expects hundreds of applications to arrive in the first weeks of 2008.
As part of the 2006 legislation, loan originators are required to take a competency test starting in 2007. That test has been available since June.
Because the licensing requirement was new and the number of applicants was high, DFI practiced leniency, allowing applicants to do business as long as their paperwork was submitted and there was no evidence of grounds for denial. As of Jan. 1, 2008, however, all loan originators and mortgage brokers wishing to do business in Washington must be licensed.
The Department notified licensees numerous times in a variety of ways informing them they will not be allowed to do business in 2008 without a license and that they need to pass the competency exam prior to seeking renewal of their license.
DFI urges loan originators and mortgage brokers to take action immediately to ensure they are legally licensed to do business in Washington. Information is available at DFI’s Web site, http://dfi.wa.gov/cs/loan_originator.htm or http://dfi.wa.gov/cs/mortgage.htm or by calling 1.877.RING.DFI (1.877.746.4334).
http://www.dfi.wa.gov/ ▪ 360.902-8700 ▪ 877.746-4334 ▪ In Español 888.976.4422
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders, and securities brokers and dealers. The department has won numerous awards for its financial literacy and outreach programs developed to protect consumers from financial fraud. In addition to posting information about licensees and administrative actions, the DFI’s Web site features consumer tips on a variety of financial fraud-related topics.
About the Division of Consumer Services
www.dfi.wa.gov/cs/ ▪ 360.902.8703
The mission of the Division of Consumer Services is to protect consumers from illegal and fraudulent lending practices. The division accomplishes its mission through licensing, licensee examinations, investigations, and enforcing selected state and federal statutes and rules. Consumer Services regulates the business activities of consumer loan companies, mortgage brokers, money transmitters and currency exchangers, as well as check cashers and sellers, also known as “payday lenders.” The Division is entirely self-supporting, with funding provided by licensing, auditing, and policing of regulated businesses and individuals. No money is received from the state General Fund or other public revenue source.
Lyn Peters, Director of Communications, DFI
PH (360) 902-8731 lpeters (at) dfi.wa (dot) gov
Deb Bortner, Director of Consumer Services
PH (360) 902-0511 dbortner (at) dfi.wa (dot) gov