NMLS stands for Nationwide Mortgage Licensing System. The system main function acts as a centralized database of licensed mortgage companies and the individuals with direct and indirect contact with consumers.
It is important to recognize that prior to the NMLS mortgage education was inconsistent to nonexistent. Education requirements did not cross state lines and lead reduced consumer options in local real estate markets, and financial institutions. The lack of a centralized system took away state regulators ability efficiently set uniform standards that could educate and track loan officer training for new and existing mortgage loan officers. The ability to connect and identify loan officers to government oversight, employers, and consumers, and its individual users has enhanced efficiency to the mortgage marketplace.
NMLS Approved Courses
Having the NMLS approve courses allows for three improvements to loan officer training and education. First redundancy that loan officers were covering the basic skills multiple times and reducing their ability to add value to market because of duplicate training required. Second improvement is, better data. Why do we believe this is better, simple you have standards for delivery and tracking of results with standardized testing. This approach allows the system and it users analyze for improvement because of unified standards set by the NMLS and entities connected to it for education requirements.
Money is the reason for this system. Some say it was the largest of federally regulated banks; labeled too big to fail. Set in motion new regulations that would create an unlevel playing field to regain market share and increase profits.
Consumers benefits by having more knowledgeable professionals. Centralize place to check if the person they are working with is active, who they are working for with contact information. Mortgage companies benefit by hiring higher level workforce that is trained to new standards to deliver more value and understanding of the basics of mortgage business. Loan officers or loan originators also benefit they now have a level playing field of pre licensing education (also known as PE) and continuing education (also known as CE). Fact that now loan officers have a standard allows the new and established loan officer to be on the same level. All parties involved benefit from the NMLS and the new standards from understanding ethics & fraud to federal laws and regulations to nontraditional mortgage information to best serve the public the highest standards.