Making a mistake when refinancing can cost you a fortune and ruin your credit. A lot of people have fallen into deep financial crisis by wrongly refinancing residential loans. The Safe Act, also known as the Secure and Fair Enforcement Mortgage Licensing Act was established by lawmakers to protect consumers from misleading lending practices and fraud. The essence of crafting the act was and still is to do away with shoddy residential lending. Primarily, the act puts forward a system that resisters and licenses genuine loan originators who are qualified to carry out their duties accordingly.
There has been an elimination of the many deceptive loan programs that existed a while ago. This, however, does not mean that you should relax, vigilance is crucial if you want to avoid financial disasters when selecting lending experts.
Initially, loan originators, commonly known as loan officers, were commissioned sales people without any special training that could enable them help borrowers make wise decisions when selecting a loan. This left the consumers at the hands of inexperienced people who could easily lead them into financial troubles without knowing what they were doing. In some worse cases, there were companies that hired individuals without licenses to act as loan specialists.
The resulting mortgage meltdown created a path for the bureaucratic oversight in form of the act. Ever since, the safe act continues to create a transparent and ethical reporting standard for all mortgage loan originators. Some of the provisions include: credit reports, Federal originator I.D, consumer complaits tracking, criminal history, national testing, record information checks and accountability which is provided for free through the internet. To further safeguard consumers’ finances the policymakers established requirements which govern the loan officers in every aspect that have to deal with.
The requirements are meant to ensure that the loan originators are licensed individual who have received special training, taken the necessary tests and passed. The one place that the act gaps is that not all the originators are required to go through the pre-license training. These are officers who work in credit unions or chartered banks. This just tells you that you are not all that secure.
The fact that the lawmakers trust that the banks will properly train and screen their originators does not mean that you should also do the same. You don’t want to be the mistake they will learn from and thus you should take your time and be diligent enough to ask for the officer’s license. If they don’t have the license they must then tell you which license they work under so that you can check the licensing authority’s website for their history. Make sure you are working with a genuine financial expert to avoid crumbling financially.
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