Tag Archives: SAFE Act

NMLS License Renewals Off to Strong Start

Submitting renewal requests in early December significantly reduces the likelihood of a NMLS license being terminated on January 1, 2016

By Jeff Sorg, OnlineEd Blog

(December 8, 2015) –  The 2016 renewal period for the Nationwide Multistate Licensing System (NMLS) is off to a strong start, with renewal approvals up from last year.  NMLS announced that 64 percent of licenses managed within the NMLS have been submitted for renewal, and 66 percent of those requests have had their licenses approved. At this time last year, 60 percent of licenses had submitted applications and 65 percent of those requests were approved.

So far 16,265 companies, 21,120 branches, and 169,866 individual licenses have had their renewal applications approved.

“Though we have seen an increase in the number of licenses submitted for renewal, compared to this time last year, SRR continues to encourage non-depository entities to submit their annual renewal request as soon as possible to increase the likelihood of having their licenses approved by December 31,” said Sue Clark, Director, Regulatory and Consumer Affairs for the Vermont Department of Financial Regulation and Chair of the NMLS Policy Committee.

Renewal facts, as of December 1, 2015:

6,496 (64 percent) financial institutions have requested renewal;
309,612 (81 percent) federal registrants have renewed;
246,343 (63 percent) state mortgage loan originator (MLO) licenses have requested renewal and 69 percent have been approved;
As a percentage of renewable licenses, the number of MLOs to request renewal is five percentage points higher than in 2014, and the approval rate of those requests has increased by two percentage points; and
84,902 (70 percent) state-licensed MLOs have completed annual continuing education.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

 All information contained in this posting is deemed correct as of the date of publication, but is not guaranteed by the author and may have been obtained by third-party sources. 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.

Oregon Begins Using Uniform State Test for Mortgage Loan Originators

Source: NMLS(Jeff Sorg – OnlineEd) – The Conference of State Bank Supervisors (CSBS) has announced that the Oregon Department of Finance and Corporate Securities (DFCS) began using the National SAFE Mortgage Loan Originator (MLO) Test with Uniform State Content. This brings the total number of state agencies using the test to 46.

The Oregon DFCS regulates both bank and non-bank mortgage lending and is responsible for licensing individual MLOs employed by lenders and mortgage brokers who take loan applications or negotiate terms of residential mortgage loans with prospective homeowners.

The test, which was first made available on April 1, 2013, combines both the national and state testing requirements of the SAFE Act and streamlines the license application process for MLOs seeking licenses in multiple states. For these adopting states, the new test replaces the separate, state-specific tests.

Since its release on April 1, 2013, more than 42,000 MLO applicants have taken the National SAFE MLO test with Uniform State Content.

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For more information about OnlineEd and their education for real estate brokers, principal brokers, property managers, and mortgage brokers, visit www.OnlineEd.com.

  This article was published on January 12, 2014. All information contained in this posting is deemed correct and current as of this date, but is not guaranteed by the author and may have been obtained by third-party sources. 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.

 

CFPB Releases Second Update Of Exam Procedures For Mortgage Rules

(CFPB – WASHINGTON, D.C.) On August 15, 2013 the Consumer Financial Protection Bureau (CFPB) released a second update to its exam procedures in connection with the new mortgage regulations issued in January 2013. The interim exam procedures offer valuable guidance to financial institutions and mortgage companies on what the CFPB will be looking for as the rules become effective.

“We are committed to transparency around our examination process,” said CFPB Director Richard Cordray. “So we have worked hard to provide industry with advance notice of what we will be expecting. That, in turn, will improve compliance and benefit consumers.”

The CFPB issued several new regulations reforming the mortgage market in January 2013. Many of the new rules were directed by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The rules cover the various stages of a consumer’s mortgage experience, from shopping for a loan to paying it off. Most of the CFPB’s new rules go into effect in January 2014.

Today’s updates cover the Ability-to-Repay/Qualified Mortgages, high-cost mortgages, and appraisals for higher-priced mortgage loans, as well as new amendments related to the escrows rule. The updates also cover recent changes to credit card rules. With today’s release, the exam procedures now cover the Bureau’s mortgage origination rules issued through May 29, 2013, and mortgage servicing rules issued through July 10, 2013.

Image (C) CanStockPhoto

Are you prepared for your CFPB exam?

Today’s release of exam procedures will help financial institutions and mortgage companies understand and prepare for how they will be examined for CFPB rules that, among other things:

  • Require lenders to evaluate a borrower’s ability to pay back the loan: Under the Ability-to-Repay rule, lenders must look at a consumer’s financial information and verify its accuracy. Lenders then must evaluate the information and conclude that the borrower can repay the loan. Lenders may not base their evaluation of a consumer’s ability to repay on teaser rates. They must determine the consumer’s ability to repay both the principal and the interest over the long term − not just during an introductory period when the rate may be lower.
  • Ban or limit certain points, fees, and risky features: Both the rule on Ability-to-Repay and the rule on high-cost mortgages ban or limit certain points, fees, and risky features. Under the Ability-to-Repay rule, a Qualified Mortgage is subject to limitations on points and fees and cannot have loan features such as terms that exceed 30 years or interest-only payments. Under the high-cost mortgages rule, balloon payments and fees for modifying loans are generally banned.
  • Require servicers to provide monthly statements and disclosures: Mortgage servicers must provide regular statements which include: the amount and due date of the next payment; a breakdown of payments by principal, interest, fees, and escrow; and recent transaction activity. For most adjustable-rate mortgages, they must also provide disclosures before the first interest rate adjustment, and before interest rate adjustments alter the payment amount.
  • Restrict dual-tracking: Under the Bureau’s rule on mortgage servicing, dual-tracking – when the servicer moves forward with foreclosure while simultaneously working with the borrower to avoid foreclosure – is restricted. Servicers cannot start a foreclosure proceeding if a borrower has already submitted a complete application for a loan modification or other alternative to foreclosure and that application is still pending review.
  • Require access to servicing personnel and a fair review process: Mortgage servicers must have policies and procedures in place to provide delinquent borrowers with direct, easy, ongoing access to employees responsible for helping them. If a foreclosure seems likely, the servicer must consider all alternatives available from the mortgage owners or investors to help the borrower retain the home.
  • Require creditors use a licensed or certified appraiser: The interagency rule from January 2013 on appraisal requirements for higher-priced mortgage loans requires that creditors use a licensed or certified appraiser to prepare a written appraisal report based on a physical inspection of the interior of the property. The rule also requires creditors to disclose to applicants information about the purpose of the appraisal and provide consumers with a free copy of any appraisal report.

The CFPB is sharing with industry what it will be looking for in its examinations under the new rules by updating the applicable sections of the exam procedure manuals for the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). These documents are intended for use by CFPB examiners in examining the mortgage companies and other financial institutions subject to the new regulations.

The CFPB is committed to ensuring that the mortgage industry complies with the new consumer protections. Throughout 2013, the CFPB has been working for a smooth transition. It has published plain-language guides. It plans to educate the public about their protections under the new rules. The CFPB is also coordinating with other federal government regulators that also conduct examinations of mortgage companies and financial institutions to ensure all regulators have a shared understanding of the CFPB’s new rules.

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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 consumerfinance.gov.

OnlineEd is a provider of mortgage and real estate continuing and pre-license education and developer of InlineEd a compliance and learning management tracking system for the mortgage industry.

Ten More States to Use Uniform Mortgage Test; 30 States Now Using the Test

(OnlineEd® – Portland, OR) The Conference of State Bank Supervisors (CSBS)  today announced that an additional 10 state mortgage loan originator licensing agencies will begin using the National SAFE MLO test. This brings the total number of state agencies to 30 who are using the test.  The test was first made available on April 1, 2013, and combines both the national and state testing requirements of the SAFE Act. Because the new test replaces the separate, state-specific test for the states who adopt it, it streamlines the process for mortgage originators who want to hold multiple state licenses.  Any mortgage loan originator who passes the test is compliant with the SAFE Act testing requirements in all thirty states. For a limited time, between April 1, 2013 and March 31, 2014, there is also the short version, stand-alone UST available for anyone who has previously passed the retired national test.

Twenty state agencies initially adopted the National SAFE MLO test in April, and an additional 10 state agencies will adopt it today.  These 10 state agencies are:

• The Alabama State Banking Department;
• The Alaska Division of Banking and Securities;
• The Indiana Office of Secretary of State;
• The Kansas Office of the State Bank Commissioner;
• The Montana Division of Banking and Financial Institutions;
• The Nebraska Department of Banking and Finance;
• The New Jersey Department of Banking and Insurance;
• The Tennessee Department of Financial Institutions;
• The Vermont Department of Financial Regulation; and
• The Wyoming Division of Banking.

states adopting

 

An additional five state agencies are scheduled to adopt the test by Jan. 2014.

More information on the National SAFE MLO test is available here.

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About CSBS:
The Conference of State Bank Supervisors (CSBS) is the nationwide organization of banking regulators from all 50 states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands.
About OnlineEd:
OnlineEd is a provider of mortgage and real estate broker pre-licensing and continuing education courses, as well as the developer of  InlineEd, an education and compliance management software for the mortgage industry.  For more information about OnlineEd please visit www.OnlineEd.com. For more information about InlineEd, please 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.

CFPB Releases Exam Procedures for New Mortgage Rules

(CFPB – WASHINGTON, D.C.) — On June 4, 2013, The Consumer Financial Protection Bureau (CFPB) published the first update to its exam procedures for the new mortgage regulations it issued in January 2013. The exam procedures offer financial institutions and mortgage companies valuable guidance on what the CFPB will be looking for as the rules become effective. The new regulations include those on appraisals, escrow accounts, and compensation and qualifications for loan originators.

“The CFPB recognizes that the easier we make it for financial institutions and mortgage companies to follow the new regulations, the better off consumers will be,” said CFPB Director Richard Cordray. “By releasing details of what our examiners will be looking for well in advance of the effective date of most of the rules, we are giving industry more time to adjust.” Consumer Financial Protection Bureau logo

In January, the CFPB issued numerous new regulations reforming the mortgage market, many of which were directed by the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. The rules cover many stages of a consumer’s mortgage experience, from shopping for a loan to paying it off. Most of the CFPB’s new rules go into effect in January 2014.

Today’s release of exam procedures will help financial institutions and mortgage companies understand how they will be examined for CFPB rules that:

  • Set qualification and screening standards for loan originators: A loan originator must be ethical and knowledgeable. They will need to: meet character, fitness, and financial responsibility requirements; pass criminal background checks; and complete appropriate training.
  • Prohibit steering incentives: Compensation for a loan originator generally cannot vary with the loan terms. A broker or loan officer cannot get paid more if the consumer takes a loan with a higher interest rate, a prepayment penalty, or higher fees.
  • Prohibit “dual compensation:” A loan originator cannot get paid by both the consumer and another person such as the creditor.
  • Protect borrowers of higher-priced mortgage loans: The required duration of an escrow account on higher-priced mortgage loans extends from a minimum of one year to a minimum of five years.
  • Prohibit the waiver of consumer rights: It is prohibited to bar consumers in their mortgage or home equity loan or related agreements from bringing a claim in court in connection with any alleged violation of federal law.
  • Prohibit mandatory arbitration: Mandatory arbitration of disputes related to mortgage loans is generally prohibited for mortgage and home equity loans.
  • Require lenders provide appraisal reports and valuations: Mortgage lenders will need to provide applicants with free copies of all appraisals and other written valuations developed in connection with certain mortgage loan applications.
  • Prohibit single premium credit insurance: Creditors will be prohibited from financing certain credit insurance premiums in connection with certain mortgage loans.

The CFPB is sharing with industry what it will be looking for in its examinations under the new rules by updating the applicable sections of the exam procedure manuals for two laws – the Truth in Lending Act (TILA) and the Equal Credit Opportunity Act (ECOA). These documents are intended for use by CFPB examiners and the financial institutions and mortgage companies subject to the new regulations. They are the first round of updates for what will likely be multiple updates.

The CFPB is committed to the mortgage industry’s compliance with the new consumer protections. Throughout 2013, the CFPB has been working for a smooth transition. It has published plain-language guides. It plans to educate the public about their protections under the new rules. And it plans to publish additional interim examination procedures. Within the next several months, the CFPB will publish its first round of exam procedures for the Ability-to-Repay and mortgage servicing rules.

The CFPB is coordinating with other federal government regulators that also conduct examinations of mortgage companies and financial institutions to ensure all regulators have a shared understanding of the CFPB’s new rules. This multi-agency effort includes the interagency development of exam procedures. For example, the TILA procedures released today are based on the approved Federal Financial Institutions Examination Council procedures. This interagency effort helps promote a consistent regulatory experience for industry.

OnlineEd SM LogoThe Interim TILA Examination Procedures can be found at: http://files.consumerfinance.gov/f/201306_cfpb_laws-and-regulations_tila-combined-june-2013.pdf

OnlineEd SM LogoThe Interim ECOA Examination Procedures can be found at: http://files.consumerfinance.gov/f/201306_cfpb_laws-and-regulations_ecoa-combined-june-2013.pdf

 

Once these and other exam procedures have been updated with the new mortgage rule requirements, the CFPB will incorporate all amended sections, including the TILA and ECOA sections, into its general supervision and examination manual.

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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 consumerfinance.gov. For more information about OnlineEd® please visit www.onlineed.com. For more information about the OnlineEd®  mortgage industry compliance management and education solution, InlineEd,  please visit www.inlineed.com.

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.

Time is Running Out for Mortgage Loan Originators to Renew License (2011)

(Jeff Sorg, OnlineEd® – Portland, OR) Mortgage Loan Originators please plan accordingly! It will take NMLS 24 hours to recognize that an education provider has submitted a MLO’s continuing education completion notice to the NMLS database. A MLO cannot submit an application to renew a license until they have completed their annual continuing education requirement and the education provider has uploaded  the record to NMLS. When enrolling in their continuing education course, the MLO should make certain to enroll with their name as it appears on their license, and supply their correct NMLS number. The NMLS is not forgiving on name variations or license name and license number mismatches.

The NMLS hours of operation are Monday through Friday, 9 AM to 7 PM Eastern. In addition to normal Saturday and Sunday closure, NMLS will be closed on December 24 and 25, and again on December 31 and January 1. The last day for technical or customer service support for on-time continuing education reporting will be Friday, December 28 at 3:00 PM Eastern. To be safe, OnlineEd is recommending to MLOs that they complete their education not later than Friday, December 21st. MLOs will be at risk of missing their renewal if their education is not reported by Friday, December 28, which means the education provider must report by Thursday  December 27. MLOs are guaranteed, according the NMLS, to miss the renewal if reported on Monday, December 31.  As usual, OnlineEd will report continuing education completions to NMLS the same or next day (excluding Christmas), including weekends.

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For more information about NMLS, please visit their web site. For more information about OnlineEd® or to purchase their courses, please call 866.519.9597 or visit www.OnlineEd.com.

New Rule Changes the Number of Times a MLO Can Fail SAFE Test

(OnlineEd – Portland, OR) – On August 29, 2011 the US Department of Housing and Urban Development (HUD)  implemented a new rule for the SAFE Act. This rule changes the number of times a mortgage loan originator (MLO) can fail a SAFE MLO test component from four to three before being required to wait 180 days before retesting.

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 www.OnlineEd.com for your continuing education needs

Mortgage Loan Originators Can Win FREE Continuing Education

OnlineEd

Yes, you read that title right! OnlineEd® is offering one FREE 8 Hour SAFE Comprehensive Continuing Education Course every single week until December! All you have to do is head over to our facebook page, click like, and fill out the entry form. We pick a new winner every Friday at 3PM (PST). One entry per week only please. Multiple entries during the same wake will be disqualified.

Each winner will receive the complete 8-hour online course ($125 Value) which has been approved by the NMLS for continuing education credit for 2011.

Winners will be notified on Friday after the drawing.

 

NMLS Provider ID: 1400327
NMLS Course ID: 1888