Hi, I've seen this term a few times, but I don't really get what it means. Anyone know?
A federal mortgage loan originator simply means the originator doesn't need to be individually licensed in a specific state. If an originator works for a federal thrift or national association (i.e. Wells Fargo, Bank of America) they do not need to be licensed in specific states. If an originator works for John Doe Mortgage Company in Maryland and JDMC only lends in Maryland, Virginia and DC, then the originator would have to take and pass the required courses for each state in order to be able to lend in those states. It's not mandatory to take each state test but you can't originate in those states until you pass. The distinction falls on the liability where a Federal originator isn't required to take tests because of the compliance regulations already placed on federal thrifts and NA's. The State originator is going to be bound by the state's specific regulations. Something to keep in mind, not all banks are federally licensed and some mortgage companies have federal licensing. Hope that helps.