What is a federal mortgage loan originator?

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.

A federal loan originator is a fancy title for an individual employed by a federally insured or chartered business, like a bank or a credit union, who negotiates residential loans or completes loan applications. This is in contrast to people who work at state-licensed institutions who must hold a state license to conduct business within an individual state. The federal requirements for loan originators include a background check conducted by the FBI, at least twenty hours of mortgage loan education in topics like ethics and finance, a credit check and the passage of a licensing examination. These individuals must be registered with the Nationwide Mortgage Licensing System & Registry (NMLS).

Federal loan originators must meet all the requirements of the federal registration process and can conduct business throughout the country, not merely a handful of states. An active status indicates that the originator currently meets all the federal requirements, while an inactive status indicates that all those requirements are not currently met. State licensed individuals must adhere to controlling state rules and regulations while federal loan originators are bound by federal compliance regulations. In particular, federal loan originators must adhere to the Consumer Financial Protection Bureau's regulations and the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act).