I was talking (rather, e-mailing) an old friend the other day. Someone who I probably hadn't talked to since college. We went back and forth, are you married, do you have kids, have you lost all your hair yet. You know, the standard fare.

We talked a little more about our jobs and he asked me what I was doing and he said "How did you get into being a mortgage person....I thought you studied Philosophy in college?"

I had no answer. I just got into the mortgage business, and that was it.

The fact is, many get into the mortgage business quite by accident. There are few colleges or universities that offer degrees in mortgages. Yes, there are college courses that offer mortgage banking classes and one can certainly get a degree in finance. But if you'll ask around you may be surprised that they too just "fell" into the business.

But if you don't get a degree in mortgages, how does one study, much less prepare for, mortgage banking?

It depends. In California for example, mortgage brokers must hold certain education requirements. Loan officers there also have to hold a real estate license in order to "practice" the business of mortgage lending. The licensees must study and take tests and every so often renew their license to continue working in the mortgage field. These courses can vary, but usually the most popular courses concern running a business, real estate contracts, ethics, and the avalanche of real estate practice and lending laws.

In Texas, licensees must have minimum education, net worth and work experience along with annual continuing education classes.

In other states, to quote Woody Allen, "80% of life is just showing up." Some states require no licensing at all: there are no continuing education requirements or net worth minimums.

Is that bad? It's only bad if you get a bad loan officer. In some states where licensing is not required, the mortgage company can't be blamed for not having a license. If there's not a license to get, then how can you get one? And if the mortgage broker or mortgage banker doesn't need a license, then you can bet a mere mortgage loan officer will not be required to obtain any form of state certification.

In states where licensing exists, use your due diligence and determine if the mortgage company is legally doing business in your state. Ask about licensure and, if you like, check with state authorities. With the advent of the Internet, it's much easier for a mortgage company to advertise, illegally, in a state where they're not supposed to practice.

Licensing attempts to establish minimum requirements for mortgage lending, experience in the industry, and to enforce certain state statutes regulating the industry. And while not all lenders are licensed, there is a lot of regulation related to mortgage originations.

The Department of Housing and Urban Development along with the Federal Trade Commission have established exhaustive rules and regulations to which mortgage companies must adhere.

And that's just the beginning. Payments of fees to various businesses in a typical real estate transaction are monitored using the Real Estate Settlement Procedures Act (RESPA), Federal Truth in Lending laws and various governmental requirements from the Federal Housing Administration and the Department of Veterans Affairs.

So if in indeed your loan officer doesn't have a degree in mortgage lending or your state does not issue licenses for mortgage loan officers, go to Plan B. Ask people who have just financed or refinanced about their experiences. Speak with local real estate brokers. Check the Internet. Speak with loan officers. See who makes sense, who promises too much, who has a history of successful work, and who is recommended.

And if a state license is required, so much the better. Make sure the loan officer is in good standing with state regulators.

For more articles by David Reed, please press here.