Will your Credit History Land you in the Unemployment Line?

March 8, 2010

For those of us in the mortgage origination business in Texas, recent news from the Texas Department of Savings and Mortgage Lending (TDSML) might be a little worrisome.

The SAFE Act requires all residential mortgage loan originators (RMLOs) to submit a filing through the NMLS that will authorize NMLS to obtain a credit report on that individual. As part of this process, state mortgage regulators must determine the individual has demonstrated financial responsibility. The following items will trigger a TDSML review:

Bankruptcies filed within the last TEN YEARS;
Current outstanding judgments (except judgments solely as a result of medical expenses);
Current outstanding tax liens or other government liens;
History of and current collection accounts;
Foreclosures within the past three years;
Three or more accounts more than 90 days past due;
Multiple Social Security Numbers attached to the individual’s name;
Consumer provided comments;
No credit history for the individual;
Credit items the individual is appealing, if noted in the report; and
Outstanding child support.

TDSML will not rely on credit scores when determining an individual’s fitness for a license but may look at systemic, long-term financial irresponsibility as a reason to further investigate the information received before a final licensing decision is made. No single item listed above will serve as grounds for ineligibility, but several will cause further investigation and each decision will be made on a case by case basis.

The NMLS registry will be required for ANYONE originating in the country. For many people in mortgage industry who have seen their incomes drop nearly 70%, those first few items might very well be a sad reality. We want to encourage everyone we are in contact with to carefully review your credit history, and be prepared for a review if you fall into any of the items on the above list.

Southwest Funding works closesly with the TDSML including the Commissioner, Director of Licensing, and General Counsel. We know what it takes to get registered with the NMLS. Contact us today and see how Southwest Funding can help.

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