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Your private information is never more vulnerable than when you are applying for a mortgage.  It is inevitable that you will have to provide someone with the keys to your entire life. This includes paystubs, W-2’s, bank accounts, stocks, bonds and of course your social security number.  It is also very possible  that you are giving this information to a complete stranger. So how do you know who you can trust?  Here are some things to consider:

1.       Check to see if your loan officer is licensed to originate mortgage loans in your state. You can start by checking the NMLS  (National Mortgage Licensing System ) consumer access site @ http://www.nmlsconsumeraccess.com/ .    In order to be listed on the NMLS , a loan officer must undergo a full background and credit check.  If your loan officer is listed here, they have passed the background check. Not all states are currently listed on the NMLS, so confirm that your state is currently a participating state before alarm bells go off if your loan officer is not listed. Here is a list of current states on the NMLS.If your state is not listed, do a search for your states mortgage originator license requirements. It is also not unreasonable to request that your loan officer provide you with a copy of their license. Something else to note, loan officers for federally chartered banks are not bound by the NMLS licensing requirements.

2.       Try to work with someone that you know or comes highly recommended. One of the great features on Zillow is access to consumer reviews.  If you have a loan officer with 95 reviews and all are 5 stars, they are probably someone that you can trust.  Loan Officers on Zillow also do a pretty good job of policing the community.  Not everyone on Zillow has a significant amount of reviews, if any at all. So it might not be fair to dismiss them completely, simply because they are new to Zillow Mortgage Marketplace.  In that situation, I would recommend doing a little bit of internet research on your loan officer and just as importantly the company that they work for.  Always interview your loan officer over the phone or in person and trust your gut.

3.       Whenever possible, go directly to your loan officer to submit your financial documents at their office. Take a look around the office. Are all  state licenses displayed in plain view? Do you see loan files spread all over the place? Are sensitive income documents in plain view? These are red flags! All loan documents should be kept under lock and key at all times, unless they are being reviewed.  A responsible loan officer will have a desk that is clear of sensitive information.

I believe that the mortgage industry is primarily made up of upstanding professionals.   Through regulations like the NMLS, it is getting better every day. Still it is necessary that you perform diligence to protect your identity and your assets.

About the Author

Over the past 7 years, I have worked as a retail loan officer and a wholesale account executive for companies owned by Goldman Sachs, HSBC and Barclays Bank. In addition to traditional conforming mortgages, I have originated over $40 million in government loans ( FHA, VA, USDA) in both the wholesale and retail lending channels.

  • http://www.creditreport.com Tiffany

    There’s so much trust that has to be involved in this process. I actually looked into the loan officer reviews provided on this site and the were quite helpful!

  • http://www.redwoodfs.com David

    Good advice. NMLS has problems, but the standards for licensing Brokers are great protection for the consumer.

    I think determining the knowledge level of your loan officer is also important. Consider how long they have been in business. I have seen several companies change their names regularily to avoid regulations. This should be minimized or even eliminated with NMLS, but as mentioned above, not every State participates with NMLS yet.

    Funny thing is that if you go to a bank to get a loan, you have a very good chance that the loan officer is not very experienced. It is one of the reasons they hand you a big package and tell you to fill it out. Additionally, beware that they are not required to be part of NMLS. It appears they are exempt from consumer protection.

    See today’s interest rates

  • very observant lady

    Something strange happened to me bidding on a house. My agent told me a house I was bidding on, the bank owned property required me to do a prequalification. When I called the lender, it turned out to be a whole mortgage application over the phone. Having just done one with my lender and a bank, I didnt see the reason for this. I was told it was required in order to purchase the house. I asked many questions before I gave up information. After everything was said and done, I get an email saying I was qualified for a home purchase through this bankowned lender with a lower price and great interest rate. The only problem was I never told them I was going through their company. I made an offer to purchase my home with my own lender. I was advised I would have to pay for my all of my own closing cost. I agreed to this to see where they were going but then they ask for proof of where my money was coming from. Hah, someone is pulling a stall, scam and I feel scum creeping up the wall. Well I told them during the pre qual interview and they knew I was not going to use their company. My agent told them we were not giving no more information. Therefore our offer was rejected the offer. I then sent an email advising them to not use my information from this day forward or in the future. This mortgage company has been around for over 10 years but has a gross amount of complaints online. Can I expect any information shenanigans from this company and what else do I do to protect my credit further.

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