Proposed Change in Qualifying to be a newly licensed MLO in the State of Colorado

18 Nov 2013 5:10 PM | Jayne Bail (Administrator)

On August 27th the Board of Mortgage Loan Originators directed staff of the Colorado Department of Real Estate to commence with rulemaking procedures with a view to adopting the Uniform State Test. 

In discussions with CoAMP members, it has come to our attention that most current licensees do not know of the UST and what the Board of MLO are willing to accept for qualifying as a new licensee in the state of Colorado. 

What is the Uniform State Test?

The Uniform State Test (UST) was launched on April 1, 2013 by the NMLS.  The new UST material tests applicants on their knowledge of high level state-related content that is based on the SAFE Act and the

CSBS/AARMR Model State Law (MSL) which many states used to implement the SAFE Act. 

 

 The UST can replace the state-specific test components for the states that adopt it.  State agencies may elect to adopt the UST at a future date, but they are not required to do so. State agencies which choose not to adopt the UST will continue to require applicants to take and pass the current state specific test components.

 

The UST is a new section of the required test for any new licensee to pass.  Therefore, regardless if a State adopts this as a replacement of a state specific test, a new licensee must pass this portion of the test. 

What are the current Colorado Requirements pertaining to education and testing?

The current requirements to being a new licensee in our State as it pertains to education and testing include:

  • 1.                    “each individual applicant shall complete…the twenty (20) hours of pre-licensing education requirements developed, administered and approved by the Nationwide Mortgage Licensing System and Registry” (this was initially a 40 hour requirement which was modified in  to match the S.A.F.E. ACT).
  • 2.                   An individual shall pass the test in accordance with policies and procedures developed and administered by the Nationwide Mortgage Licensing System and Registry and in compliance with the S.A.F.E. Mortgage Licensing Act.”  The test consists of two parts including a national component and a Colorado state specific component.

What is the change that is being proposed by the Board of MLO?

The proposal from the Board of Mortgage Loan Originators is not yet explicit in writing.  The Colorado Association of Mortgage Professionals is waiting for the DRE to draft the rule.  The current proposal, however, is to eliminate the Colorado state specific part of the testing.   In lieu of the Colorado state specific test, the proposal will accept the Uniform State Test (UST) as the prerequisite of licensure in Colorado.  The UST does not cover any state specific law, rules and/or regulations.  Moreover, the UST includes questions that are not relative and even contradictory to Colorado State Law.   The proposal from Board of Mortgage Loan Originators will require an applicant to take two hours of Colorado education through a substitution of two of the current twenty hours of pre-requisite education. 

Therefore, any education component that may have been in place for those two hours (ethics, best practices, fundamentals of mortgages…etc) will be replaced with the Colorado state specific education.  

CoAMP View:

CoAMP Board of Directors have discussed this issue at length and we are not in support of this change. This change would  lower the standards of being a new licensee in our State, and thereby lower the performance, professionalism and education of future licensees.  This could have a negative impact in our State for the Consumer. 

We have not yet been able to determine the benefit of the proposed change to Colorado. 

We would like to know your thoughts on this proposal. Please click this link to take a survey for this subject.   

https://www.surveymonkey.com/s/BLY8XN5

Thank you for taking the time to provide feedback so we can better serve you.

CoAMP Board of Directors

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