Licensing requirements hindering industry growth

by Justin da Rosa11 Mar 2016
Discrepancy between licensing requirements for originators and bank specialists are discouraging bank reps from going independent and helping to grow the industry, according to one veteran.

“The challenges we face on the regulatory side as a mortgage brokerage company is our ability to hire people from banks that might want to leave the bank but it takes a long time for them to get licensed on the broker side,” David Lichtman, president of DML Mortgage, told Mortgage Professional America. “So there is an inequity in the licensing on the regulation side that prohibits us from perhaps achieving stronger growth.”

Licensing requirements for brokers and originators varies from state-to-state. In Lichtman’s home state of New York, for example, aspiring professionals must take a number of courses, which include lessons on ethics and federal law.

The courses require over 30 hours of lessons and a fee of $1,500 for brokers and $319 for originators. Further to that, aspiring brokers must provide a $10,000 Surety Bond.

Quite the obstacles to overcome – especially considering the low barrier of entry for bank reps.
“That being said, if you work for a federally chartered institution such as Chase, Wells, you don’t need to take those tests,” Lichtman said. “So the theory behind it, which maybe made sense in 2007 when everything was crashing, was that the lenders would self-regulate and there is no need  and the brokerage community needed to be reined in.”

Lichtman argues the stringent requirements may no longer be necessary.

“There was no doubt that was the right move to make, but now here we are almost ten years later and now there’s an unequal playing field and America is all about that middle class and the small business ability to grow. We’re definitely hindered by that.


  • by get this done! | 3/11/2016 11:23:35 AM

    Very well said, I agree totally
    Ron Bender
    Bencorp Financial

  • by Bill | 3/11/2016 11:52:22 AM

    If an originator for a broker needs to be licensed, so should an originator for a bank. The double standards imposed by our government need to end. With all of the recent changes, the education required for licensing is even more important, but everyone has to be held accountable equally.

  • by cheryl | 3/11/2016 12:06:08 PM

    Well said Bill: those are the key words EVEN PLAYING FIELD....there has been a double standard for way too long....So "bank specialist" pull up a chair, belly up to an online course, PAY the fees and take the test. Problem is....Let's all go back, those banks took these "specialist" because they could not pass the tests, did not have the financial character required in the field. Now I'm personally using one example (a known person to me) When you can't pay your own bills, can't maintain payment to bankruptcy court, can't pay child support and fail the required educational testing 4 times over; NO you should not be working in a brokers office, in the banking field or with consumers at all. Anyone originating a mortgage need all these requirements; fees, education and financial, bank, mortgage bank, etc. I totally agree to equality!


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