2010 is going to be a year like no other. I believe it is naive to think that 'business as usual' will be taking place when we return to work on Monday morning and expect it to be the same throughout the coming year.
Yes, it may not seem very obvious at first. Maybe you'll have a buyer that you need to get pre-qualified and you call your lender thinking they can throw something together for you over the course of 15 minutes or so. You may become disturbed when your lender says that they are no longer allowed to provide this service without documentation, as per their corporate attorneys and the new RESPA rules.
So lets say you get past this hurdle and in a month or so, the new process - whatever that may be - is in effect and you finally got a couple of new escrows open, after jumping through burning hoops. You say, "it is just getting use to the new rules".
WHAT TEST?
What you were not aware of is your local California loan officer is mandated to take a Federal Test sometime between January 4th and May 28th. This test is now mandatory for all new California licensees and must be passed by all current licensees within this time frame. Here is a FAQ page that answers many of the questions and fills in the details.
According to a New York Times article 31% of the first 10,000 to take the test, nationally, have failed. They have not being able to muster a 75% passing score.
CREDIT RATING
The new licensing guidelines also have provisions for criminal background and credit checks. While several states have been active with this license process many more on just coming on line this year, like California. Since there is also a State facet to the entire process, it is up to each state to set the credit standards that will be acceptable for the loan originators. From what I can find on the Internet, California has not yest set the standard - but my guess since California is so well known for being a haven for consumer protection rules and laws is that the standard will be high. Several states require a minimum of a 600 FICO score and no history of bankruptcy or foreclosure. Time will tell.
One of the Loan Originators that I have worked with went through a tough time at the beginning of this financial meltdown - first his wife left, he did not concentrate on business for a few months, the house went upside down, he stopped making money and lived off his reserves without realizing what was going on around him, By the time he woke up and came to his senses the entire economy had changed - not only did he lose his wife, he lost his home and ended up filing for bankruptcy. This has been a top mortgage broker for 20 plus years - will he now not be able to keep his license? I know he couldn't get it in Massachusetts or North Carolina. (according to industry thread at MortgageGrapeVine).
WHITE LIES = 1 YEAR IN JAIL
Another significant change to the California Real Estate industry has to do with a new offence appropriately called "mortgage fraud". Now I am not an expert here - but what I believe we have dealt with up to this time ahas been a Federal Offence when dealing with federally insured loans, Well now California has added a local bite into the process making it punishable by up to 1 year in prison. The new law covers "any misstatement, misrepresentation or omission during the mortgage lending process with the intention that it be relied on by a mortgage lender, borrower, or any other party to the mortgage lending process."
CHA-CHA-CHA-CHANGES
So, I see some changes taking place in this new year that will have a significant impact on my real estate business and the affiliates that I choose to do business with. This does not even take into account what other crazy stuff is coming down the pike in 2010. We have the banks themselves to deal with - are they going to sell or horde their inventory? 2010 is an election year so politicians get all weird trying to keep people happy and you NEVER KNOW what foolishness is coming out of either Sacramento or Washington DC.
All I know is my local Hemet - San Jacinto CA Real estate business will take our lumps like the rest of the industry and transition into whatever the new laws and rules mandate. After all I have a business to run and a family to feed. What choice do I have?
Enjoy this unique video to the soundtrack of David Bowies 1972 hit song...CHANGES:
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