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Can You Become a Mortgage Loan Originator With Bad Credit?
I must have called over two dozen state mortgage licensing agencies in the past week and I am getting nothing but the runaround. I also called Mortgage Educators and other NMLS mortgage licensing schools and still cannot get the answer I am looking for. The mortgage industry and regulators are making a huge deal about not being able to get an NMLS mortgage loan originator license if you have bad credit. They are saying if you are late on your payments or have derogatory information on your personal credit profile you are classified as being financially irresponsible and not fit to become a mortgage loan originator. People can go through bad times, divorce, medical, or times of unemployment where you can have bad credit without being financially irresponsible. Now my question is can you get a mortgage loan orignator license with bad credit, collections, and late payments? Thank you in advance.
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2 Replies
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In California, credit is not an issue. However, I hear other states can be very strict with bad credit. The ability to become a mortgage loan officer with bad credit can depend on several factors, including the policies of the specific employer or financial institution you’re applying to, as well as the regulatory requirements in your jurisdiction. Here are some considerations:
Employer Policies: Different employers and financial institutions may have varying criteria for hiring loan officers. Some may be more lenient regarding credit history, while others may have stricter requirements.
Regulatory Requirements: In many places, mortgage loan officers are subject to licensing and registration requirements. Regulatory bodies may consider an applicant’s financial responsibility and credit history when issuing licenses. It’s essential to check the specific requirements in your jurisdiction.
Credit Check: Most employers in the financial industry, including mortgage lenders, conduct a thorough background check on potential employees. This often includes a credit check. While a less-than-perfect credit history may not automatically disqualify you, it’s crucial to be upfront about your situation and address any concerns during the application process.
Experience and Skills: Your professional experience, skills, and knowledge in the financial and real estate industries can be significant factors in securing a mortgage loan officer position. If you have a strong track record in these areas, it may compensate for a lower credit score.
Improving Your Credit: If possible, take steps to improve your credit before applying for a mortgage loan officer position. This may involve paying off outstanding debts, addressing any inaccuracies on your credit report, and demonstrating responsible financial behavior.
Networking and Referrals: Sometimes, personal connections and referrals can play a crucial role in getting hired. Networking within the industry and leveraging professional relationships may open doors, even if your credit history is less than ideal.
It’s essential to research the specific requirements of the employers you’re interested in and to be honest about your credit history during the application process. Additionally, consider seeking advice from professionals in the mortgage industry or a career counselor who can provide guidance based on your specific situation and local regulations.
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This reply was modified 10 months, 2 weeks ago by
Gustan.
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This reply was modified 10 months, 2 weeks ago by
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There are certain states like Georgia and Texas who are very strict with collections, charge off accounts and derogatory credit tradelines. Credit scores do not matter. Late payments is okay as long as you are still paying. California does not even look at credit scores. I know people with judgments and tax liens who got their NMLS license in California. More and more states are becoming more aware of bad credit and questioning NMLS MLO applicants for collections, and other bad credit. If you have a written payment agreement you are fine. If you fall behind on your bills but are making an attempt to pay little every month, that is fine too. However, if you totally ignore your prior bad credit than it can be a problem in most of the states. If you file bankruptcy, you are totally fine because that wipes out all of your debts. Here is a popular blog that explains how I had to deal with regulators when I had bad credit and the issues I got in certain states because of derogatory credit tradelines:
https://gustancho.com/can-you-become-a-loan-officer-with-bad-credit/
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This reply was modified 10 months, 2 weeks ago by Gustan.
gustancho.com
Can You Become A Loan Officer With Bad Credit And Get Licensed
Can You Become A Loan Officer With Bad Credit? Absolutely. I have over 50 derogatory credit items such as unpaid collections, charges offs
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This reply was modified 10 months, 2 weeks ago by