Will new Nevada Lending Requirements and National Testing for Loan Officers help clean up the Industry?
Posted by Paul Francis on Sunday, January 3rd, 2010 at 11:42am.Will New National Testing
Clean up the Lending Industry?
"Must be Pre-Approved with such and such Lender... "
Anybody going through the frustrations of attempting to purchase a Bank Owned Home in Las Vegas certainly knows all about this requirement. A recent call from a prospective buyer frustrated with trying to buy a home in Las Vegas had three pre-approvals from different lenders... an obvious sign to me that they had unsuccessfully been chasing bank owned homes.
While the process of getting pre-approved with the REO Agents desired lender is certainly a nuance to me since I have my favorite long time loan officer who works for a local mortgage company and does what they say they are going to do, I certainly can understand the requirement since I've run into my share of less then knowledgable Las Vegas loan officers that will say anything just to lock up a potential loan.
So, this article from the New York Times highlighting the failure rates of the new federally mandated licencing exams certainly was no surprise to me:
31% of loan officers failing basic fundamentals test
Prospective licensees in 11 states began taking the exams on July 30, followed in late October by those in six more states and Washington. On Dec. 10, New York and New Jersey started offering the tests, which feature roughly 100 questions in the national version and about 50 for the state version.
The exam administered by the Conference of State Banking Supervisors varies from state to state and covers basic principles of the lending process including federal laws, general mortgage knowledge, the loan-origination process and ethics. Loan officers working for conventional banks do not need to take the test.
Licensing Requirements for Nevada
Effective October 1st, 2009 - Licensing Requirements for Nevada Mortgage Brokers and Agents
Initial applicants for a mortgage agent license who have not been issued a license by the Division before October 1, 2009, are required to complete pre-licensing education (see below) as well as successfully pass the PSI test.
Initial Applicants Must Complete 30 Hours of Certified Courses of Instruction
- 4 hours of ethics, which shall include instruction on fraud, consumer protection and fair lending issues
- 12 hours of federal law and regulations relating to mortgage lending, including 2 hours of training related to subprime lending and other non-traditional mortgage products
- 4 hours of Nevada law and regulations relating to mortgage lending and
- 10 hours of electives*
* Qualified employees must complete at least 4 of the 10 hours of electives in instruction relating to office policy and procedure, risk management, errors and omissions, affiliated business arrangements, labor relations, general management principles, loan prequalification and loan processing.
Certainly feel free to correct me If I'm wrong... but these requirements are FAR more extensive to become a Loan Officer in Nevada then during the bubble days. From what I remember, the main requirement during the pre-bubble days was a pulse.
Will the new requirements in Nevada keep the past from happening again?
Paul Francis, CRS
Prudential Americana Group - Realtors®
Las Vegas Real Estate
702.592.3058
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