Massachusetts had been lagging behind other states in its requirements for mortgage loan originators, but no more.
Originators who started working in Massachusetts after Nov. 29, as well as anyone who applies for a state originator license for the first time after May 27, will now be required to take a 24-hour course on the basics of the mortgage industry to get or maintain that license.
About 600 of 6,350 applicants for originator licenses fit into this category and must complete the course by Sept. 1 in order to continue working in the field.
Going forward, all first-time applicants for state originator licenses will have to take the course.
The Division of Banks, which oversees mortgage companies and banks, has to date approved three entities to offer the originator training course, including the Massachusetts Mortgage Education Council, a joint effort by the Massachusetts Mortgage Association and Massachusetts Mortgage Bankers Association.
“Never before has Massachusetts had any type of training for loan originators,” noted Debbie Sousa, MMBA’s Education Director, who helped develop the curriculum.
She said the hours and type of training are heavily regulated.
“We’re expecting people for three full days, and every hour is regulated. You have to be sitting in your chair for 55 minutes [out of the hour],” she said.
As DOB requires, the curriculum will include an overview of the mortgage business, ethics, lending basics, appraisals, government loans, types of finance instruments, conventional and alternative financing, federal and state laws, and legal concepts of real estate.
Sousa and Denise Leonard, executive director of the broker trade group Massachusetts Mortgage Association, along with about a dozen others from both trade associations, created the course.
“We tapped into different expertise, different individuals and different materials we had access to,” Leonard said. The associations also purchased and have customized some course materials.
MMBA and MMA ran one course last month, and have rented space in Randolph from July 29-31 for a second offering. They are charging $295; Sousa said an effort was made to keep costs low.
The Lee Institute School of Real Estate, in Brookline, is also approved to offer an originator training course, as is Advanced Education Systems, LLC, of Maryland, doing business as TrainingPro.
The requirement to have a license is also new to Massachusetts.
In fact, a state law passed less than a year ago requires both a license and the new lending course.
Originators employed in Massachusetts before the end of last November and those renewing licenses won’t need to take the class, but will have to keep up their knowledge of the field by completing eight hours of continuing education each year.
Sousa said the new requirements may be confusing now, but will likely reduce confusion in the long term.
“More and more, as a [nationwide] industry, we’re becoming level in the way we do business,” she said.
