I was speaking with another broker this morning. He knows I'm not only a Texas Real Estate Broker but a licensed Mortgage Loan Originator (MLO) as well.
He was telling me about a transaction that was going south quickly. One of his agents has a listed property under contract. The buyer's agent provided a pre-approval letter from a local lender.
The sellers have a new home under contract. Inspections have been completed, repairs negotiated, and the appraisal is done. The only contingency is the sale of the seller's current home.
His agent follows up and the buyer's agent related that the buyers may not be qualified for the mortgage! We're less than a week out from closing and we're just finding this out? The broker had not heard of the mortgage company so I told him I would check it out.
I quickly jumped on the National Mortgage Licensing System (NMLS) consumer website (http://www.nmlsconsumeraccess.org) and did a search for the (MLO). Not good! The MLO is not authorized to conduct business and her license expired on January 1, 2011. This tells me that she did not convert to NMLS and take the required education and testing. I also did a look-up on the company hoping to call the broker. The MLO is the broker and the owner of the company.
My first thought was, "silly buyer's agent...did you not check out the lender your client was working with?" What a mess! Not only will the seller's home not close, but neither will two more homes down the line.
I suggested that the listing broker contact the Texas Department of Savings and Mortgage Loans to report the unlicensed activity and try moving the buyers to a known MLO to see if the loan can be closed.
As a heavy listing broker it made me stop and think. I always call the MLO to get a feel for the loan but I never check out their licensing any more than I check out other real estate practitioners who I work with.
I did some checking in Plano. Pre-NMLS there were over 1200 originators in Plano. Only 124 of them made the conversion to NMLS and remain licensed to originate. Going forward I plan on checking out the licensing of any MLO who provides a Conditional Qualification or Conditional Approval letter.
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Tom Branch and Gina Branch, The Branch Team with RE/MAX Dallas Suburbs, service the greater North Dallas suburbs including Dallas, Plano, Allen, McKinney, Frisco, Lewisville, and Carrollton. While Gina concentrates on traditional listings and buyer/tenant representation, Tom specializes in assisting distressed homeowners to avoid foreclosure. Tom and Gina have published two books (Achieving Rock Star Status and The Field Guide to Short Sales) and are available for speaking engagements in the greater Dallas - Fort Worth Metroplex. Subscribe to The Branch Team Blog.
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The Branch Team - Texas Real Estate Broker 547597 | Team Members are Texas Licensed Real Estate Professionals
Tom Branch - National Mortgage Licensing System 341963
Important Notice: The Branch Team with RE/MAX Dallas Suburbs is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.
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