Minneapolis, MN - On Monday July 30th the Minnesota Mortgage Association held it's monthly meeting to discuss how the new mortgage laws passed in Minnesota will affect how mortgage companies within the state operate. The panel of speakers included, but not limited to, Wade Abed of Northwest Mortgage also the President of the Minnesota Mortgage Association, Robyn Brown of the Department of Commerce, Eldon Spencer representing legal counsel and Pat Martin.
Minnesota mortgage brokers have been under scrutiny for the latest increase in foreclosures. This has lead up to the state of Minnesota passing new laws designed to eliminate some of the uneducated and unethical mortgage brokers and companies in the state. At the same time, the new state laws that have been passed override some federal government laws that are designed to protect consumers.
Beginning August 1st 2007 all mortgage companies will be required by state law to carry a net worth of $250,000 or a $50,000 surety bond in order to keep their doors open. This law was designed specifically to eliminate most of the smaller mortgage companies and individuals practicing as a sole proprietorship. To date, over 500 mortgage companies doing business in the state of Minnesota have pulled their license and closed their doors. That number will continue to grow as the renewal date for mortgage licenses approaches us in October of 2007.
The biggest change in the new law is the elimination of stated mortgage loans. This means that you are no longer able to say that you make X amount of money a year without proving it with paystubs or tax returns. Those who are self-employed may find it very difficult to obtain a home loan in the state of Minnesota. This law supersedes a federal law that allows Minnesotans to purchase products of their choice.
The state has also passed a law that will make it mandatory for loan originators to attend 15 hours of mortgage related classes pertaining to mortgage ethics and standards. This law will keep the dedicated, career minded originators in the business. This will also eliminate the opportunity for individuals to jump back into the mortgage industry without the proper education when the market makes a shift for the better.
My name is Jeremy Redlinger and I have been in the mortgage industry since the age of 22. My philosophy is to cater to the needs of homeowners by education. If you enjoyed this article, you can find many more like it on just about any topic when it comes to financing a home on my website entitled Mortgage Minneapolis.