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National Licensure of Mortgage Originators Is a Must- I Don't Want to Work Hard

Call your members of Congress and Senators today! Write letters to the President! Please take action because I am about to tell you of the most evil injustice being done today.

Mortgage originators do not have a national licensing program and THAT has to change!

I propose that the House Financial Services Committee get cracking on legislation that would increase the minimum standards of loan originators. Here is what I think would be appropriate:

READ ON AT AMERICA's MORTGAGE BROKER

Posted by Brian Brady- America's VA Home Loan Broker on 06/22/2007 03:24 AM

Comments (54)

Originally posted at: America's #1 Mortgage Broker: National Licensure of Mortgage Originators Is a Must- I Don't Want to Work Hard

54 Comments on National Licensure of Mortgage Originators Is a Must- I Don't Want to Work Hard

JUN

2007

This would definitely add some credibility to an industry that has some reputation issues (and it is those 75% that would be weeded out that is giving the industry its name.)

Probably a good idea. Might help put a stop on some of the bad loan issues we all know about.

Brian: I agree with much of what you propose and wish some of those same standards could be applied to real estate licensure.

But...do I see your tongue pressing out your cheek? LOL!

Brian..... great concept, when did you come up with this?

Seriously though..... you made some awesome points. #1 I might have to disagree with. There have been some great self taught people in our history. Other than that, I definitely agree about having that person work under someone certified, but maybe for a year. Gee, I took a 3 day crash course and taught the rest to myself. Because I wanted to be the best at what I did, but also able to give the best advice and not what I would want so I could make money.

Overall..... continued education needs to be implemented. And I loved your last sentence and I couldn't agree anymore. "I'm sick of working hard for my money."

I couldn't have said it any better.... excellent post and and a timely one at that. We need change.

jeff belonger

I agree in that I think national licensing might provide much needed oversight.

Good post!

Thanks for an enlightening post!

"The Pinehurst Home Team"

Brian, boy are you frikin clueless. Loan Originator licensing is within the States. They do a background check to make sure there are no felonies or money laundering in most states that do licence LO's. I am a Registered Financial Advisor. and it is the job of the NASD...National Association of Securities Dealers, and the SEC ...Securities and Exchange Commission to Regulate Securities and Insurance practices and proceedures. So why would you even think to include Loan Originators....were just processing a loan and transaction between 2 parties. This seems like more of a Personal vendeta because you don't even have a clue of what your talking about....Do you have to have a Degree in Real Estate Law to sell Real Estate? Why not? Yes I have a Business Degree and Insurance and Securities licenses that I paid alot more for those 4 licenses than Realtors, and have to do 3 times the amount of CE hours evey year. Why is it I can go to Office Max and get a Purchase and Sale Agreement and go to a Mortgage broker and get a loan to buy a FSBO, and I don't even need a lawyer or GED to do that. And Loan Originators get paid alot less than Realtors. Why can't people just educate themselves on buying or selling a home....why does the Government need to make laws just because people are to lazy to learn a little...instead lets blame it on someone, take them to court and let the tax payers take care of it....Just ad another 5% sales tax on the sale of everyones home. You work hard? guess you don't have much respect for steel workers, commercial fisherman, High Voltage Electricians, and people that really risk their lives....

#2...what is this "We" crap on you as a Realtor granting me a license.....If lenders and Investers want to be loose with their money and Investments...it is up to them...not you with the God complex! Why is it that the bank teller doing a loan still doesn't have to be licensed?...Because banks are exempt. But then again if you understood Securities and how lending really works, you would be able to understand.

I have a good friend who is a Realtor, He has a Doctorate degree in education...would he meet your standards?

Chuck.... just because you have strict licensing requirements in Washington, doesn't mean anything. Just because you get fingerprinted and it comes clean, doesn't mean you would know how to advise someone on how to obtain a mortgage.

You must be very busy if you do both mortgages and financial advising. I mean, are we here to bash what people think or have as a degree? I have seen doctors with degrees that screw up or botch a surgery.

Overall, it's not a personal agenda, it's fact. How come you did a blog on lenders such as DiTech, Lending Tree, and a few others...putting them down. Local Lending....or tv ad.... But Brian puts down the industry as a whole, because we do need some changes... reform. You go after specific companies and make it sound like all lenders and loan officers in Washington would never bait and switch per se. Do you know this for a fact? Reality?? I know loan officers that have had background checks try and defraud clients. Those with degrees.... there are thieves per se in any industry, no matter what kind of background you would have.

Summary..... from what I gather from what Brian wrote about, is the fact that if we can make the standards higher and tougher, it might cut down on those that will abuse their position in helping that home owner.

Lastly..... you said : So why would you even think to include Loan Originators....were just processing a loan and transaction between 2 parties. This seems like more of a Personal vendeta because you don't even have a clue of what your talking about....

First off, I think you meant to say.... we're just processing? In any case, is that all you do, make sure the loan gets processed? hhhhmmmm.... don't think of yourself highly? Not putting you down, just asking a question based on your statement. I am just assuming. But for myself, one that is extremely passionate in what I do, I do much more than make sure a loan gets processed. But I could be here for a long time, describing on how I help my clients and how I earn my business. And it's not based on my fingerprints or my background checks. Even though this is a start. We wouldn't want a criminal handling your finances or their personal information. And a FYI.... a lot of states don't require this, just to be a loan originator. Several states just started doing this.

In any case.... that's all I have to say for now. Sounds like someone has some anger issues. Good luck.

jeff belonger

And Chuck.... did you read the comment in your local lending post that I placed in the comment above? The 2nd comment basically talks about education instead of licensing. Local Lending....or tv ad....

Good God people...I am totally against licensing. Read the whole posts (including the links). Occupational Licensing is a scam, promulgated by the states to collect fees.

Licensing does NOT protect the consumer. In fact, it provides a false sense of security under the implied endorsement by the states. Proposed national originator licensing laws (or even the existing state licensing laws) are designed to protect the licensees NOT the consumer. It puts up a large barrier to entry so as to reduce competition and inflate fee income.

Roberta! You got it! You read the whole post (most likely with the links).

I HATE OCCUPATIONAL LICENSING LAWS...they are just plain stoopid and anti-consumer

Chuck.. we agree...read the WHOLE post (including the links).

Washington's licensing, however, is a joke. It doesn't protect the consumer, it protects the originators who are "in the club"

I understand securities and lending...a little bit. Click on my profile .

Brian you may be joking, but I think their needs to be stricter standards. I am sick of seeing the public taken advantage of by untrained and unethical loan officers. After talking to our state regulator agency yesterday, I am thinking about writing another blog post on this subject.

Randy,

Stricter standards are not going to solve that problem. The biggest offenders against the consumers who are "taken advantage of" come dressed in a blue suit and red tie. (never suspenders; we're the good guys).

The license does more harm than good because it gives consumers, unwilling to educate themselves, a false sense of security. Admitting that the industry offers a plethora of choices is the way to warn the consumer that they need to perform some due diligence.

Never has there been a better time for the borrower than today. There are more loan choices now (well, maybe six months ago) than there were in 2001. There are liberal loan programs available to most credit-worthy consumers that can help them buy or refinance a home.

Never have there been so many originators in the business as there are today...and that is GOOD for the consumer. More providers equals lower costs. If you establish stricter standards and tougher licensing laws you limit the consumer's choices and drive the cost of credit up.

Now, if you REALLY want to limit choices, require a fiduciary relationship with the borrower. That will require an exclusive brokerage agreement and limit the consumer choices even more.

Why not? I'm in the club! I hate the idea but I won't fight it; more cheese for me

That's a great idea, I enjoy your blogs..they're very interesting.

I find it amazing how many people comment without reading the whole post. I thought it was very clear that Brian was using his usual sarcastic side in this post.

I will admit that I have not read the links yet (just look at what time I am writing this), but I know Brian and how he feels about this issue and I am with him on this.

Stricter standards through licensing is the standard way for the government to try to fix things, and we know that the governement is too political to do it correctly. Ultimately, if they decide to implement these restrictions, they will be doing the consumer an injustice. The good thing for loan originators is that many who do not meet the requirements will be removed from their positon allowing the rest of us to make more money.

I do agree that there are way too may unethical, immoral, incompetent, uneducated, etc. loan originators that shouldn't be able to even input data into the LOS, but licensing and stricter standards are not the best way to "weed out" these individuals.

Besides, how many laws do we have that are absolutely useless do to the lack of enforcement of them. I see many violators in the Miami area every day, even right in front of the police, yet nothing is done. I have even seen cops run red lights, so how are we to expect that any type of licensing is truly going to work?

While licensing may eliminate some, Jeff B. said it best when he mentioned that you will still have unethical, immoral, incompetent loan originators even after the licensing and education. Consumers need to do their research and not just "trust" the guy with the lowest rate and fees, etc.

Brian,

Damn You!

Sinister cynics should be licenced! You raised my blood pressure 23 points and I'd only got to the second "#1"!

The Fed's have done so well regulating and controlling business. They are so good at financial planning, no one needs to worry Social Security will take care of us. NASD's never had a scandal. The VA's mandate is to help the vet's and we all know that someday soon that message will trickle down to their staff. With out the FHA who'd guide ghetto managers? Yup! I'm all for a National license!

If this post weren't bad enough, when I reread it to make sure I hadn't missed something and spotted the last paragraph (I think you were editing while I typed.) I had to go back and delete everything between Brian and Bill (all 2,371 words) and start over.

Bill

PS: Damn you and damn good! Let's hope it gets everyone's attention!

I do agree with you Brian. I think with stricter licensing requirements, etc. it would bring alot more credibility to our industry. Thanks for the post.

Well, I couldn't agree more. Licensing for Mortgage Originators would immediately weed out the bad apples, permit only qualified persons to get licensed to practice and completely protect the public from incompent practitioners - - - just like licensing in the real estate industry does for persons practicing real estate brokerage.

Brian, I just love reading your stuff. I think I especially liked your comment. "Good God, People".... LOL Do you talk to yourself when you're blogging?

Good Morning Brian-

Great post - especially if you read the entire thing! Those Members that DON'T certainly stick out like a sore thumb.... (and how many times do I have to tell you braces, NEVER suspenders!)

While things, MANY things, need to be done to improve our business, paying for a peice of paper - some people call it a license - isn't one of them.

In FL it so easy to get a license -

I particularly hate to hear the MB vs LO argument that ends with the MB being better BECAUSE of the license. Total BS!

And as others have mentioned - we don't necessarily need more laws - we need to start enforcing the ones that are already there.

Bryan, sounds good to me, afer all many do sell in a lot of states. Wonder why this hasn't been done before, as realtors we have to get licensed in every state. I have found some out of state lenders, don't know that in MI we have each side of the transaction pay a portion of the title insurance, some don't know how to do our tax prorations and it becomes a big mess.

It's a good point, consider how many brokers are practicing unlicensed and inexperienced. Unsuspecting clients are losing everything because brokers can get a license for a few hundred dollars and a two hour meeting at mcdonalds. weed out the bad ones and the few that don't even want to learn the proper way to write a mortgage and it will be the start of a new day..

Thanks for the post...

How about let's just get the states to just start with some basic training and licesne requirements that are at the same base point. I have to agree with you that something needs to be done but loo at it from a more realistic point of accomplishment. I have a college degree with a major in finance and banking, I am licensed as a RE Broker, Insurance Broker and Mortgage Originator so your minimm requirements are not my issue since I exceed them, but I do not ever see any state making them this rigorous for any mortgage person at any level

That would certainly clean up the industry. I also think that Realtor standards should be elevated.

Exempting employees of Federally Chartered Banks from licensing is the stupidest thing I have ever heard...

Brian - I had to do a double-take, and re-read it a few times. I saw a couple of things that just made me scratch my head:

"A minimum of a Bachelor's degree in a business discipline."

"Fees for arranging loans can skyrocket!"

"Licensing will slow down the loan process which is great."

In my head, I was thinking, "Ok, I can see some validity in some of this stuff. But some of this is really off base in my own humble opinion." Then, I finally clicked on "Do I sound a bit cynical here? I should because occupational licensing is all about making the licensees fat, rich, and lazy. "

Aha, Whew. You had me concerned for a bit Mr. Brady. Good job and I'm pretty much on your side on this one. This thing was more tongue & cheek than a....nevermind.

I think I enjoyed the clueless comments almost as much as the post. =)

My personal favorite in your post is your declaration that this proposal will save consumers from themselves. That's definitely pie-in-the-sky thinking. oh-but wait-you're talking about the Feds! Of course!

Some of this seems self serving or a barrier to entry...into the mortgage business. On the other side there are a bunch of clueless lenders of course my car dealerships service department is clueless at times too! I have even met more than a few clueless Realtors so increasing educational requirements would help. I do not know if going to the extreme is the answer but something to protect the public is certainly in order. I think I read the other day the lending industry is policing it's own and tightening lending rules. Who created the sub-prime loans? It was not the mortgage broker. Like anything else I use those that do the job and offer choices to buyers and sellers based on performance. Nice stimulating post...

So, mortgage professionals, what are you going to do about it?

I published an article in my ezine years ago entitled "More Important to your Business than Marketing and Sales COMBINED" where I addressed this. Get to know your legislators, people! You can make a difference. I had one client who was able to get a dumb dumb law taken out of committee by (a) getting together a group of other brokers, (b) visiting legislators and (c) explaining to them why the proposed law would not meet the goal of "protecting the consumer." (The law would have, in fact, done the exact opposite.)

It is not that difficult (or time consuming) to effectively lobby your legislators. Next year is an election year -- the time is now.

My activerain page: http://activerain.com/mortgagevirtualassistant

What is going on with some of these comments, in this case Jackie?

what makes the real estate professional out there think that there should be jobs created and tax dollars spent to get a task force together to deal with licensees on a national level?

that's a waste of national tax dollars and no one wants to pay more taxes

right now the nice thing about having this handled at the state level is that we are limited to states we are licensed in for our practices. This limits our range of potential damage if we are not good at our profession.

I think States need to make it harder, not the fed... and then on top of that I think that the NAMB needs to do a better job and set up more like the NAR with its own policing policies...

Here in Wisconsin we do have the CE requirements and the background check. I agree with the CE and I also think we should have to go to a training for each type of loan we are licensed to do, i.e., FHA, VA, Conventional, Etc..

The CE here is pretty good. Also, Wisconsin has some pretty strong compliance laws.

Who among us can demonstrate an example where occupational licensing really served any one else but the State?

Brain... "I'm sick of working hard for my money." If originating loans is hard work for you, you need to make some changes in your marketing strategies. There are plenty of consumers out there for all of us if you know where to go to find them. The LO, if he wants to be successful and last a long time in the industry, will have to set himself apart from the others in the industry. The only way to do this is by building a reputation for yourself. You can have all the liscensing in the world that you want, but the bottom line is if you don't treat your customers right in the first place they will not come back to you let alone refer their friends and family members to you.

Jeremy - Not that Brian can more than fend for himself, but I think it was a tongue in cheek comment if I'm not mistaken...

he only way to do this is by building a reputation for yourself. You can have all the liscensing in the world that you want, but the bottom line is if you don't treat your customers right in the first place they will not come back to you let alone refer their friends and family members to you.

Why? I have the education, experience and expertise. Why should I have to market myslef and pay for advertising if I can pass a strict licensing. I am a professional, Jeremy. Professionals shouldn't have to be concerned about such things like advertising.

Besides, the consumer hates ads. Especially the spam that goes into our e-mail. The government should market for me by raising licensing standards to such a high level that it eliminates most of my competition.

It's my right.

Oh...wait a minute. I don't believe that...I need to reread "You are so expendable"

Oh Brian-

What fun. This is a great post to start the weekend with, and the comments! I'm having a ball here.

You are right about this. And Greg's right. There is only one way to make things work as they should work, as they could work: Remove barriers. Current models would change immediately and we, as in both consumers and the business, would be better off.

i find it odd that if you work for a bank you don't need to be licensed...only brokers. Government consistency would be nice. with all the horror stories out there...i only see it getting worse with govt. intervention unfortunately.

Brian,

It seems everyone has a passionate opinion about this. I read your entire post and the first 10 comments. I don't feel qualified to offer up much on this, but as a real estate agent, I sure like the comfort of knowing my buyer is working with someone who:

Knows what they are doing
Has met some sort of standard to be able to do what they are doing
Has some regulatory agency watching over them

Thanks for the post,

Fran

I agree with about 80% of what you just said! Especially the part about their being a period of apprenticeship before a loan officer can be licensed. I think that it's a shame that somebody can be working at a Mobil gas station one day and then the next day taking a loan application!

The college degree thing is a bit over the top though. A two year period of working in the field under a supervising loan officer would do more than somebody getting a degree from Southern Mississippi Hodunk College!

Bob Mitchell

ValueList Real Estate Services, Inc.

Bob,

I was joking. I think licensing is stoopid.

"Why? I have the education, experience and expertise. Why should I have to market myslef and pay for advertising if I can pass a strict licensing. I am a professional, Jeremy. Professionals shouldn't have to be concerned about such things like advertising." If you dont advertise how are new prospects going to find you without referrals? You think just because you have the education, experience and expertise just like many others in the field that people should flock to you? Maybe advertise is the wrong word, maybe I should use the word marketing. Is AR not a marketing strategy that you implement into your daily routine? Do you or do you not write useful content from time to time to "market" yourself in hopes of new customers? Don't get me wrong, the industry does need to be cleaned up a little bit and I have the education, expertise and for the age of 27, 5 years of experience. I would have no problem with passing any laws that they throw at the industry but I guarentee I will continue to market myself to close more loans then the next guy.

Brian,

I had hoped that a few hours sleep would have tempered my reaction to this article, it did, some.

The article is brilliant, thought provoking, educational (showing the absurdity of the argument) and it commands the attention of the reader.

After 3 or 4 additional readings reading I remain in awe, and a bit green not with envy but nausea. I also read the comments. By my count there are 15 that are in favor of the proposal. There acceptance explains how people accepted the writings of Karl Marks and Adolph Hitler, and the movies of Mical More and Al Gore, more government is always the answer. Scarier still were a couple of mugumps, willing to compromise.

The most upsetting though were in the 14 on our side. How can we hope to keep evil at bay with shallow arguments. I understand just how upsetting this article is if you over look the last three lines.

I think that we're going to face an attempt in Congress to implement just such laws as you proposed. Without as much as our current mugump in the White House we're going to "protect" the public right out of their own homes.

Bill

Jeremy,

I'm sorry. You are too good a guy to goof on. I completely agree with you. I wrote this post to show how silly the licensing folks take it.. You couldn't be more correct when you say that we need to be marketing ourselves to show our expertise.

Brian,

I'm all for a national mortgage originator license law. It would cure quite a few ills in the industry, not all, but many. The college requirement looks good, but might be a little too harsh. A solid license exam would be necessary, with annual renewal mandatory, including taking continuing education courses and passing an exam.

Brian:

I normally agree with you on most items, but I have to disagree with you on this one. While I am solidly a greedy capitalist pig and certainly worship free markets, licensing does serve some benefit other than solely enriching our governments.

Licensing does serve to assure consumers that the people they are dealing with at least have some minimum level of competency. Most lawyers would not argue that law school teaches one how to be a lawyer, nor does passing the bar. However, knowing that all lawyers are at least able to read, write, and have a basic knowledge of the fundamentals of the law is reassuring. The same goes with medicine. Does the licensing enrich governments and keep prices high... sure, it does. But it also keeps out a large portion of the people who have no business in the industry as well. I do believe the greater good is served.

Take the DA in the Duke rape case. He abused his power and had his license revoked. Imagine if there was a national mortgage board that would have tarred and feathered Ameriquest and all these other JT Marlin wannabes?

One of the challenges we all face as mortgage originators is that consumers have to approach us with a certain level of distrust because our entire industry operates like the wild west. There is no way for the average consumer to seperate the professionals from the boiler room refi monkeys. Given that this is the largest financial transaction of most people's lives, I do believe consumers deserve better than what they are getting. National licensing would be a step in the right direction. Do I think there should be caps on fees, etc? No... but I don't see what is wrong with requiring that "Sr. Loan Officers" are reasonable qualified for such an important transaction.

Brian- Very entertaining.. I suppose next there will be some silly expectation about competency and honesty .. :)

Can you imagine calling the President....he's too busy. It would have to be a Senator....

Brian,

Wow!

-Joe

Brian,

Well, we can see who read the post and the comments... :)

I like your tactics on this one. To save a lot of time typing... I Agree with you.

Russ:

Licensing does serve to assure consumers that the people they are dealing with at least have some minimum level of competency

Check references!

But it also keeps out a large portion of the people who have no business in the industry as well.

and it keeps a lot of competent people from starting in the business.

Given that this is the largest financial transaction of most people's lives, I do believe consumers deserve better than what they are getting.

Consumers get exactly what they want. The fact of the matter is that most consumers get a fair shake and great advice...because they do their homework. The consumers who get "ripped off" refuse to do the hrad work. If this is the largest financial transaction of their life, why do they spend more time planning for their vacation than they do planning for their financial future?

Good comments, Russ. We disagree but I can't fault your argument. The premise is wrong (in my opinion) but the supporting thoughts are reasonable

JUN

2007

Another great tongue in cheek post Brian! I am definitely torn between two lovers when it comes to more strict licensing standards.

The best will know their product and love their product and know how to market, sell and do their job. No licensing division can effectively manage that knowledge!

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