Tag Archives: mortgage broker

NMLS Smart Deadlines for 2014 License Renewal

(OnlineEd – Jeff Sorg) – The deadline to complete NMLS CE for MLO license renewal is December 31, 2014. However, NMLS Rules allow course providers seven days to report their course completions to NMLS. This means licensees will not want to wait until the last minute before completing their education requirement. If the licensee completes before the deadline, but the provider does not submit until after the deadline, the licensee is prevented from submitting for renewal on time.

In order to allow enough time for CE to be reported into the system and for the MLO to file for renewal, NMLS sets Smart Deadlines each year. These 2014 Smart Deadlines are:

SMART: Course(s) reported by your provider to NMLS by Friday, December 19
AT RISK TO MISS: Course(s) reported by your provider to NMLS by Friday, December 26
GUARANTEED TO MISS: Course(s) reported by your provider to NMLS on Wednesday, December 31

At OnlineEd®, we report your course completions just as fast as we possibly can! This means completions are usually reported to NMLS not later than the next business day from completion (weekends, holidays, and NMLS closures excluded). For completions during the At Risk to Miss and Guaranteed To Miss, we upload completions several times daily. While we do as much as we possibly can to upload in a timely manner, it remains the licensee’s responsibility to know the rules and complete in time for provider reporting to take place before the deadline.

 

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This article was published on July 31, 2014. All information contained in this posting is deemed correct and current as of this date, but is not guaranteed by the author. Due to the fluid nature of the subject matter, regulations, requirements and laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

For more information about OnlineEd and their education for real estate and mortgage brokers, visit www.OnlineEd.com. OnlineEd is NMLS Sponsor: 1400327

CFPB Orders Connecticut Lender to Pay $83,000 Civil Penalty

Pay Fine

Connecticut Lender to Pay $83,000

(Consumer Financial Protection Bureau – Washington, D.C.) Today, the Consumer Financial Protection Bureau ordered a Connecticut mortgage lender, 1st Alliance Lending, LLC (First Alliance), to pay an $83,000 civil money penalty for violating federal law by illegally splitting real estate settlement fees. First Alliance self-reported these violations to the Bureau, admitted liability, and provided information related to the conduct of other actors that has facilitated other enforcement investigations.

“These types of illegal payments can harm consumers by driving up the costs of mortgage settlements,” said CFPB Director Richard Cordray. “The Bureau will use its enforcement authority to ensure that these types of practices are halted. We will, however, also continue to take into account the self-reporting and cooperation of companies in determining how to resolve such matters.”

First Alliance is a mortgage lender in East Hartford, Conn. that focuses primarily on providing loss-mitigation financing to distressed borrowers. First Alliance obtains troubled mortgages from mortgage servicers, and reaches out to consumers to offer them new loans with reduced principal amounts under federally related mortgage programs.

First Alliance started using a hedge fund to finance its loans in 2010. Under this arrangement, First Alliance split revenues and fees with affiliates of the hedge fund. In 2011, First Alliance secured less costly financing and ended its arrangement with the hedge fund and its affiliates. Although the hedge fund and its affiliates no longer financed First Alliance’s mortgages, First Alliance continued to split origination and loss-mitigation fees with them. The hedge-fund affiliates received payments from 83 First Alliance loans made between August 2011 and April 2012.

In 2013, First Alliance reported to the Bureau that it believed it had violated the Real Estate Settlement Procedures Act (RESPA) by paying these unearned fees. RESPA bans a person from paying or receiving a portion or split of a fee that has not been earned in connection with a real estate settlement. First Alliance cooperated with the Bureau’s investigation, and the Bureau concluded that First Alliance’s payments to the hedge fund and its affiliates had violated RESPA. First Alliance’s self-reporting and cooperation, consistent with the Bureau’s Responsible Business Conduct bulletin published on June 25, 2013, were taken into account in resolving this matter.

Under the terms of today’s consent order, First Alliance is required to pay a civil money penalty of $83,000 to the Bureau and agrees not to violate RESPA in the future. The Bureau will continue to enforce RESPA’s provisions to protect consumers and to deter unlawful activity.

A copy of the Bureau’s consent order is available here: http://files.consumerfinance.gov/f/201402_cfpb_consent-order_first-alliance.pdf

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 For more information about OnlineEd and their pre-license and continuing education for real estate and mortgage brokers, please visit www.OnlineEd.com. For more information about mortgage-specific products for compliance training, tracking, and management, please visit  https://www.onlineed.com/inlineed.php or contact Joseph Mikkelson at 1.866.519.9597.

This article was published on February 25, 2014. All information contained in this posting is deemed correct and current as of this date, but is not guaranteed by the author. Due to the fluid nature of the subject matter, regulations, requirements, laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

Oregon Amends Provisions of Foreclosure Avoidance Notice

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Oregon amends Foreclosure Avoidance Measure Notice

(Jeff Sorg, OnlineEd – Portland, OR) Oregon has amended the provisions of its Foreclosure Avoidance Notice by providing for the form and content of the notice when a lender determines that a homeowner is not eligible for foreclosure avoidance measures or has not complied with an already agreed upon avoidance measure.

The form [Form 20] requires the lender to include homeowner name, lender name, and the subject property address. The lender will then check an appropriate box on the form indicating either that the homeowner is not eligible for any foreclosure avoidance measure or that the homeowner is not in compliance with the terms of an agreement already reached with the lender. The lender must describe with specificity and in plain language their basis for their determination. The form also notifies the homeowner of the date and location set for the sale of the property, cautions the homeowner to seek legal advice, and provides information about agencies and organizations to assist the homeowner.

View  or download a copy of this form.

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For more information about OnlineEd’s mortgage and real estate broker education visit www.OnlineEd.com. For more information about mortgage-specific learning management systems and products for compliance training, tracking, and management visit  https://www.onlineed.com/inlineed.php or contact Joseph Mikkelson at 1.866.519.9597.

This article was published on February 12, 2014. All information contained in this posting is deemed correct and current as of this date, but is not guaranteed by the author. Due to the fluid nature of the subject matter, regulations, requirements, laws, prices and all other information may or may not be correct in the future and should be verified if cited, shared or otherwise republished.

CFPB Finalizes April Clarifications to Mortgage Rules

Rule Will Improve Consumer Protections in Qualified Mortgages and Mortgage Servicing

(CFPB, WASHINGTON, D.C.) — Today, the Consumer Financial Protection Bureau (CFPB) finalized corrections, clarifications, and amendments to its Ability-to-Repay and mortgage servicing rules. Today’s clarifications were first proposed in April 2013 and reflect the Bureau’s commitment to facilitating implementation in order to better protect consumers.

“We know that effective implementation helps our rules deliver their intended value to consumers,” said CFPB Director Richard Cordray. “We are listening closely to feedback on our rules, and today’s clarifications show our willingness to make appropriate adjustments to achieve that goal.”

The CFPB finalized several mortgage rules in January 2013. Of those, today’s rule focuses on the Ability-to-Repay and Servicing rules. The Ability-to-Repay rule protects consumers from irresponsible mortgage lending by requiring that lenders make a reasonable, good-faith determination that prospective borrowers have the ability to repay their loans. The mortgage servicing rules establish strong protections for homeowners as they repay their loans, and especially for those facing foreclosure.

Among other things, today’s final rule:

  • Clarifies how to determine a consumer’s debt-to-income (DTI) ratio: Under the Ability-to-Repay rule, a lender may make a Qualified Mortgage (QM), a loan for which certain features are prohibited and fees that can be charged are limited. The main type of Qualified Mortgage requires that a consumer’s monthly debt payments, including the mortgage, will not be more than 43 percent of the consumer’s monthly income. Today’s rule clarifies and amends how several factors can be used to calculate a consumer’s DTI ratio. Such factors include a consumer’s employment record and income, business credit reports and other documents relating to self-employed consumers, Social Security income, and non-employment related income such as from a trust or rental property.
  • Explains that CFPB’s RESPA rule does not preempt the field of servicing regulation by states: The preamble to the Bureau’s final mortgage servicing rules made clear that CFPB authority on servicing, from the Real Estate Settlement Procedures Act (RESPA), does not preempt the field of possible mortgage servicing regulation by states. In today’s final rule, the Bureau is adding a comment to expressly state this point and explain how RESPA preemption works.
  • Establishes which mortgage loans to consider in determining small servicer status: The servicing rules issued in January included an exemption from some requirements for small servicers. Today’s changes clarify which mortgage loans will be considered in determining whether a servicer qualifies as small. For example, loans serviced on a charitable basis will not be considered in making that determination.
  • Clarifies the eligibility standard of the temporary QM provision: Under the Ability-to-Repay rule, a loan can be a Qualified Mortgage if it is eligible for purchase, guarantee, or insurance by government sponsored enterprises (GSEs) or by certain federal agencies, provided the loan does not contain certain risky loan features and meets certain limitations on points and fees. Today’s rule clarifies the standards that a loan must meet if the creditor is underwriting it based on GSE or agency guidelines. For example, where a loan is eligible for GSE or agency purchase, guarantee, or insurance, creditors do not need to satisfy the types of procedural and technical requirements that are completely unrelated to the consumer’s ability to repay.

The CFPB is committed to facilitating the mortgage industry’s compliance with the new consumer protections. Throughout 2013, the CFPB has been working for a smooth transition to compliance with the rules. It has issued other clarifications and updates to the rules to help with implementation. The CFPB has published plain-language guides and plans to educate the public about their protections under the new rules. The Bureau plans to publish additional interim examination procedures. The CFPB will also soon publish its first round of exam procedures for the Ability-to-Repay and mortgage servicing rules.

The Bureau recently published a new Regulatory Implementation web page, which consolidates all of the new 2013 mortgage rules and related implementation materials. The Regulatory Implementation web page can be found here:http://www.consumerfinance.gov/regulatory-implementation

A copy of today’s final rule can be found at: http://files.consumerfinance.gov/f/201307_cfpb_final-rule_titlexiv.pdf

 

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For more information about OnlineEd and continuing education for mortgage license renewal, please visit their website. For more information about OnlineEd’s CFPB compliance and education management systems, please visit the InlineEd website.

The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.

The CFPB Issues Procedural Rule on Supervising Nonbanks That Pose Risks to Consumers

(CFPB -WASHINGTON, D.C.) —The Consumer Financial Protection Bureau (CFPB) issued a rule that establishes procedures to bring under its supervisory authority certain nonbanks whose activities it has reasonable cause to determine pose risks to consumers. Nonbanks subject to the rule are companies that offer or provide consumer financial products or services but do not have a bank, thrift, or credit union charter.

“This is an important step in our effort to continue building a strong supervision program,” said CFPB Director Richard Cordray. “This rule clearly lays out how we plan to implement our supervisory authority over nonbanks that we determine pose risk to consumers. We are also providing industry with a streamlined process that is fair and efficient.”

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the CFPB has the authority to supervise, after following certain procedures, any nonbank that it has reasonable cause to determine has engaged or is engaging in conduct that poses risks to consumers with regard to consumer financial products or services. Such conduct may involve, for example, potentially unfair, deceptive, or abusive acts or practices, or other acts or practices that potentially violate federal consumer financial law. The Bureau must base such reasonable cause determinations on complaints collected by the Bureau, or on information from other sources, such as judicial opinions and administrative decisions.

This rule outlines procedures to notify a nonbank that it is being considered for supervision because the CFPB may have reasonable cause to determine that it poses a risk to consumers. The rule also sets out the procedures that the CFPB will follow to give the nonbank in question a reasonable opportunity to respond to such notice. For example, the rule dictates what the CFPB requires in both the notice and the response. And, the rule creates a mechanism for nonbanks to file a petition to terminate the CFPB’s supervisory authority after two years.

Importantly, notifying a nonbank under this rule simply means that the CFPB may be supervising it. The Bureau is authorized to require reports from and conduct examinations of nonbanks subject to its supervision.

In addition to the authority to bring nonbanks under the CFPB’s supervisory authority based on risk determinations, the Bureau also has authority under the Dodd-Frank Act to supervise nonbanks, regardless of size, in certain specific markets: mortgage companies (originators, brokers, and servicers including loan modification or foreclosure relief services); payday lenders; and private education lenders. The CFPB can also supervise the “larger participants” in other nonbank markets as the Bureau defines by rule. The Bureau has issued two rules defining larger participants: one rule for the consumer reporting market that went into effect in September 2012, and the other for the debt collection market that went into effect in January 2013. A proposed larger-participant rule for the student loan servicing market was issued in March 2013.

Although the Dodd-Frank Act does not require that the CFPB issue this rule, the CFPB is issuing it to be transparent in the procedures it intends to use to implement its authority under the Dodd-Frank Act. In May 2012 the CFPB issued a notice of proposed rulemaking for public comment. Based on feedback received from the public and stakeholders, the CFPB is issuing the final rule today. The rule is effective 30 days after publication in the Federal Register.

The rule is available online at http://files.consumerfinance.gov/f/201206_cfpb_final-rule_certain-nonbank-covered-persons-risk-determination.pdf

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  The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.ConsumerFinance.gov. For more information about OnlineEd, visit www.OnlineEd.com. For more information about mortgage compliance, visit www.InlineEd.com.

CFPB Issues Proposed Modifications to Mortgage Rules

CONSUMER FINANCIAL PROTECTION BUREAU ISSUES PROPOSED MODIFICATIONS TO MORTGAGE RULES

Proposal Would Resolve Implementation Issues and Clear Way for Better Consumer Protections

 (CFPB, WASHINGTON, D.C.)  Today the Consumer Financial Protection Bureau (CFPB) proposed clarifications and some narrow revisions to its January 2013 mortgage rules. The proposal issued today would resolve questions that have been identified during the implementation process and would help the rules deliver their intended value for consumers.

“When we published our mortgage rules, we pledged to be attentive to issues that arose through the implementation process,” said CFPB Director Richard Cordray. “Today’s proposal revises and clarifies certain aspects of our rules to ease implementation and to pave the way for more effective consumer protections in the marketplace.”

The CFPB finalized several mortgage rules in January 2013 that are addressed by today’s proposal. The Ability-to-Repay rule protects consumers from irresponsible mortgage lending by requiring that lenders make a reasonable, good-faith determination that prospective borrowers have the ability to repay their loans. The mortgage servicing rules established strong protections for homeowners facing foreclosure, and the loan originator compensation rules address certain practices that incentivized steering borrowers into risky and/or high-cost loans. The CFPB also finalized rules that strengthened consumer protections for high-cost mortgages, and instituted a requirement that escrow accounts be established for a minimum of five years for certain higher-priced mortgage loans.

The proposal issued today involves clarifications and some narrow revisions to those mortgage rules. Among other things, today’s proposal would:

  • Outline procedures for obtaining follow-up information on loss-mitigation applications: According to the CFPB’s servicing rule, within five days of receipt of a loss mitigation application, a servicer must acknowledge receipt of the application and inform the borrower whether it deems the application complete or incomplete. If incomplete, the servicer must identify for the borrower what is needed to complete it. The proposal would outline procedures for servicers to follow, if, after conducting an initial review and sending the notice to the borrower, they discover that they do not have the information needed to complete an assessment.

o   The proposal clarifies that servicers are required to seek the additional information from the borrower if they cannot complete the assessment without it.

o   The proposal also requires that servicers ensure that the borrower does not lose certain protections under the rule, such as a foreclosure ban during the first 120 days of delinquency, until the borrower has had a reasonable time to supply the needed documents or information.

  • Facilitate servicers’ offering of short-term forbearance plans: The proposal would make it easier for servicers to offer short-term forbearance plans for delinquent borrowers who need only temporary relief without going through a full loss mitigation evaluation process. For example, under the proposal, a servicer could provide a two-month forbearance to a borrower who is suffering a short-term hardship.
  • Facilitate lending in rural or underserved areas: Some of the Bureau’s mortgage rules contain provisions applicable to certain small creditors that operate predominantly in “rural” or “underserved” areas. The Bureau recently announced that it would reexamine the definitions of rural or underserved over the next two years. Today’s proposal would clarify how existing definitions may apply while that reexamination process is underway for purposes of two exceptions under the existing rules.

o   The proposal would extend an exception to a ban on high-cost mortgages featuring balloon payments – large, lump sum payments usually due at the end of the loan – to small creditors that do not operate predominantly in rural or underserved counties so long as the loans meet certain restrictions.

o   The proposal would revise an exemption from a requirement to maintain escrows on certain higher-priced mortgage loans for small creditors who operate predominantly in rural or underserved areas and that also meet other criteria. To prevent creditors from losing eligibility for the exemption in 2014 due to changes in which counties are defined as rural, the proposal would extend availability to small creditors that qualified in any of the previous three calendar years.

  • Make clarifications about financing of credit insurance premiums: The Dodd-Frank Act prohibition on creditors financing credit insurance premiums in connection with certain mortgage transactions was adopted in the Bureau’s loan originator compensation rule. Questions have arisen during the regulatory implementation process concerning the application of that prohibition. Today’s proposal seeks to answer those questions.

o   The proposal would clarify what constitutes financing of credit insurance premiums by a creditor – particularly as the rule applies to “level” or “levelized” premiums, where the monthly premium is the same each month rather than decreasing along with the loan balance.

o   The proposal would provide guidance on when credit insurance premiums are considered to be calculated and paid on a monthly basis for purposes of an exclusion from the statutory prohibition.

  •  Clarify the definition of a loan originator: Under the CFPB’s new rules, persons classified as loan originators are required to meet qualification requirements, and are also subject to certain restrictions on compensation practices. Creditors and loan originators have expressed concern that tellers or other administrative staff could be unintentionally classified as loan originators for engaging in routine customer service activities. Today’s proposal would clarify the circumstances under which a loan originator’s or creditor’s administrative staff acts as loan originators.
  • Clarify the points and fees thresholds for manufactured housing employees:  For retailers of manufactured homes and their employees, the proposal would clarify what compensation must be counted toward certain thresholds for points and fees under the ability-to-repay and high-cost mortgage rules.
  • Revise effective dates of Loan Originator rule and ban on financing of credit insurance: Currently, the 2013 Loan Originator Compensation Final Rule is scheduled to take effect on January 10, 2014.

o   The CFPB is seeking comment on whether to change the effective date to January 1, 2014 for portions of the loan originator rule. The Bureau believes that having the rule take effect at the beginning of a calendar year may help compliance since compensation plans, training, and licensing and registration are often structured on an annual basis.

o   The Bureau is also seeking comment on whether to adjust the effective date for the ban on financing credit insurance. The Bureau had previously delayed that date in order to provide additional guidance on the issues discussed above, and is now seeking comment on whether the rule should take effect on January 10, 2014, or earlier in light of how much time creditors would need to adjust billing practices.

 The CFPB is committed to assisting with the mortgage industry’s compliance with the new consumer protections. Throughout 2013, the CFPB has been working for a smooth transition. In addition to clarifying critical questions about the new mortgage rules, the Bureau has also published plain-language guides for each rule and some interim examination procedures. The CFPB also plans to educate the public about their protections under the rules.

The Bureau recently published a new Regulatory Implementation web page, which consolidates all of the new 2013 mortgage rules and related implementation materials, and can be found here:http://www.consumerfinance.gov/regulatory-implementation

 Comments on today’s proposal must be received on or before July 22, 2013.

A copy of today’s proposal can be found at: http://files.consumerfinance.gov/f/201306_cfpb_proposed-modifications_mortgage-rules.pdf

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 The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.ConsumerFinance.gov. For more information about OnlineEd, visit www.OnlineEd.com. For more information about mortgage compliance, visit www.InlineEd.com.

Free List of Mortgage Abbreviations and Acronymns

(Jeff Sorg, OnlineEd) – Is your CAN-SPAM in compliance with your GENESYS or are they both in need of PEP? Don’t be confused by all the mortgage abbreviations and acronyms being tossed around today! OnlineEd has put together a list of the most commonly used mortgage industry abbreviations in this free PDF

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If you have questions or would like to learn more about OnlineEd®, please visit www.OnlineEd.com.

This article was published on May 30, 2013.  All information contained in this posting was current as of this date.  Due to the fluid nature of the subject matter, regulations, requirements, laws, prices and all other information may or may not be correct in the future and if cited, should be verified before use.

CFPB Releases Informative Videos on YouTube

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CFPB rules hit the “big screen!”

Confused about the CFPB’s January 2013 new mortgage rules? Don’t have an afternoon to read a series of .pdf files? Check out the new videos that the CFPB just posted on YouTube.

We’re trying to make our rules more understandable and more user-friendly, setting out as clearly as we can what you need to know, and what you need to do, in order to comply with the rules.” – Richard Cordray, CFPB Director.

Following up to their March 2013 promise of publishing plain-language guides to January 2013 mortgage regulations in both written and video form, the CFPB has posted several videos on YouTube explaining these recently published regulations. The overview takes a little over one hour to watch, and is available to watch in one movie-like chunk, or in smaller segments concerned with each specific January 2013 rule. If you are looking for information without having to sift through pages and pages of online documents, OnlineEd highly recommends brewing yourself a cup of coffee and devoting an hour of your workday to familiarize yourself with these regulations.

The CFPB is actively looking for ways that they can make these new rules more accessible to every mortgage professional, and is taking comments and criticism. Richard Cordray has this to say:

We’re currently taking feedback on the guides, so please let us know what you think.”

Information on how to submit feeback is contained with each of the guides.

It’s Time For Mortgage Loan Originators to Start Their Annual NMLS Continuing Education

(OnlineEd) – Every state-licensed mortgage loan originator (“MLO”) in any approved status is to complete at least 8 hours of NMLS approved license renewal education as part of their license renewal requirements.  This annual continuing education must include 3 hours of Federal law, 2 hours of ethics, which includes fraud, consumer protection, and fair lending issues, and 2 hours of non-traditional mortgage lending, plus one additional hour of elective courses. In addition to the 8-hours of education, some  states have an additional state-specific course requirement. To find out the requirements for each state, please visit the NMLS State-Specific Education Requirements (July 9, 2012).

Because of a successive years rule, MLOs are not to take the same CE course two years in a row, but can take from the same provider two or more years in a row.  The provider’s NMLS ID number for the course indicates whether a course is a duplicate course. If a course has a NMLS ID number different from the course completed in the prior year, the course is not the same as the year prior and it will satisfy the requirements of the NMLS. At OnlineEd® (www.OnlineEd.com), the NMLS approved education course package is brand new and can be used by the thousands of licensees who used their courses last year.

The annual deadline to complete license renewal continuing education is December 31, 2012. However, NMLS gives course providers seven days to report a course completion into NMLS. Because of this seven days to report rule, MLO’s should not wait until the last minute to  complete CE or they may be prevented from submitting for renewal on time. The renewal is submitted when the provider uploads the licensee’s completion to the NMLS, not the actual date the course is completed by the licensee.  The team at OnlineEd® is usually able to upload NMLS course completions not later than the next business day from the licensees completion of their courses and, in most cases, they will even upload the same business day. Because the NMLS does not process course completions on weekends or holidays, the final date providers can upload completions this year is Friday, December 28th. MLOs are encouraged to complete all their educational requirements not later than December 21st.

To learn more about the OnlineEd® NMLS approved courses, please visit their web site.

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 OnlineEd® is NMLS approved under provider number 1400327.

OnlineEd® is a licensed vocational school offering real estate broker, mortgage broker, and insurance licensing courses.

For more information about OnlineEd®, please visit www.OnlineEd.com or contact Paul Cleary at 866.519.9597