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Special Reports
Recruiting and Training
NY Brokers Must Meet Ed Condition of New Law
By Brad Finkelstein
Mortgage originators in New York State have a three-month window to get their
documents in so they can receive their authorization certificate under the state's new mortgage loan originator
law, a representative of the New York State Banking Department told attendees at the New York Association of Mortgage
Brokers annual convention here.
The law goes into effect on Jan. 1, 2008 and includes educational requirements for all MLOs. There is an effective
date of April 1, explained Albert Gabriel, assistant deputy superintendent and he told the audience to "apply
early and do not wait until March 30" to send the banking department a MLO application.
Those who must apply, and the law covers all who originate loans in New York State with certain exemptions, will
be able to do so online. The department will use a system piggybacked to one being used by the Council of State
Bank Supervisors.
However, fingerprints of MLO applicants must be sent in to the department manually.
Mr. Gabriel reminded the audience "there is no grandfathering in this statute." All originators, no matter
their level of experience, must meet the educational requirements. Even if the person is licensed as a broker,
if he or she performs mortgage originator activities, they must register as MLOs. Those who are based out-of-state
but originate loans in New York, also must comply with the law.
The authorization certificate belongs to the individual, not the company. If the individual changes firms, the
certificate moves with him or her. The banking department needs to be notified, Mr. Gabriel said.
Greg Krauza, immediate past president of NYAMB, added if a person is just taking information over the phone and
then passing it on to a loan officer, they do not need authorization under the MLO law.
Mr. Gabriel continued that this makes it a need for owners and managers to define what their employees do, so that
someone does not step over the line and thus needs to get authorization.
He added that at first the department would be issuing temporary authorizations to allow it time to check paperwork
submitted by applicants. Applicants will have one year after they receive their permanent authorization to meet
the educational requirements.
There is a five-year look-back period for education classes already taken as long as those course meet curriculum
standards set by the superintendent of banking, Mr. Krauza said. While it is not yet official, he added, the department
is likely to use standards built upon the standards of the National Association of Mortgage Brokers education courses.
Under the law, the applicant must have taken 18 hours of approved courses in that prior five-year period. If not
met, they have one year after approval to fulfill the requirement. Going forward, an MLO must complete 18 hours
of education courses every two years.
When asked if taking a NAMB course in another state would qualify, Mary Ann Pino, a NYAMB board member who is a
member of NAMB's education committee, said it probably would but would still need to be approved by the New York
regulators because the course may contain specifics of that other state.
She said NYAMB offers education classes to its membership at no cost or at a reduced cost and Mr. Krauza said the
group had no obligation to give cost-effective education classes to non-members, declaring it to be "a privilege
of membership" in the trade organization.
NAMB does offer online classes through a relationship with TrainingPro, Ms. Pino said, but that has a fee and she
reiterated her point that NYAMB offers live classes at no cost to members.
Mr. Krauza said that company owners have the responsibility that their MLOs are in compliance at all times with
the education requirements.
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