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SALT LAKE CITY — The clock is ticking for thousands of Utah mortgage licensees who may lose their ability to do their jobs if they don't meet new federal standards by year's end.
According to the Utah Division of Real Estate, brokers must meet the federal Nationwide Mortgage Licensing System deadline for renewal and complete the required education and testing by Dec. 31.
Only 5,200 licensees had transitioned onto the NMLS database by the May 31 deadline. Of those licensees, only 2,000 have requested renewal and completed the necessary requirements, a news release stated.
The Division began 2010 with 9,027 mortgage licensees. Utah mortgage licensees who fail to request renewal through NMLS and meet requirements will have to re-apply for licensure by completing 20 Hours of NMLS pre-license education, 40 hours of Utah pre-license education, pass both NMLS Utah and NMLS national exams and reapply for license.
"Last spring we asked mortgage licensees to get on the NMLS federal system," said division director Deanna Sabey. "To date, around 50 percent of our licensees have complied with the first step but are still in danger of losing their license if they fail to renew their license and meet the NMLS requirements by the end of December."
She said the December 31 deadline affects mortgage loan originators, associate lending managers, branch lending managers, principal lending managers, mortgage entities and branches, among others.
Sabey said she is concerned that licensees are "forgetting this important step" and — beginning in January — will be very unhappy to learn they are no longer licensed to originate loans in Utah.
She also expressed anxiety about the potential for some mortgage brokers to conduct business illegally just to make money.
"My bigger concern is that people will continue to originate loans without a license and, therefore, violate the law," Sabey said. "We have given (licensees) ample opportunity to take the steps to renew their licenses, and if they don't do it, then the responsibility is on them."
She said that while the vast majority of brokers operate within the law, there are some who would do otherwise if they thought it was worthwhile financially.
"Their license has expired and they haven't taken the steps to renew, (but) they have the opportunity to originate a loan where they can make (thousands of) dollars and they've got bills to pay," Sabey said explained hypothetically. "They are put in that situation and all of a sudden it makes it a lot easier to justify and rationalize, doing (a) loan without a license."
Brokers found guilty of processing loans illegally in Utah would have their licenses rescinded permanently, she said.
"The way the federal (law) is set up, if they are revoked in Utah they cannot qualify for licensure in any other state," Sabey said.
All the more reason to complete the renewal process by the Dec. 31 deadline, she said.
Visit www.realestate.utah.gov for more information or contact the Utah Division of Real Estate at 801-530-6747.