Mortgage lenders in Indiana have less than three weeks remaining to pass a federally mandated exam, or their licenses will be revoked.
Lenders have until July 1 to pass the test. But as of Friday, only 58 percent had done so, according to the Securities Division of the Indiana Secretary of State’s Office.
All mortgage lenders and principal managers must pass what is known as the National Component SAFE test. The test is mandated through the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008.
The law does not allow for any waiver of the test. Lenders must wait 30 days after each unsuccessful attempt at taking the exam.
The Securities Division began alerting mortgage lenders in February of the upcoming deadline. The state has 1,086 licensed mortgage lenders and principal managers.
Failure to pass the test by July 1 will result in a license revocation. By Indiana law, an individual who has his or her license revoked cannot apply for another license.
Mortgage lenders have the option of surrendering their licenses to the Securities Division before July 1 to avoid revocation.
A housing crunch that led to a flood of foreclosures led federal lawmakers to pass legislation in an attempt to tighten lending standards and prevent another crisis.