The California Association of Mortgage Brokers, the same organization that sponsored the trade show that featured completely irresponsible lending practices, has drawn a line in the sand with this statement that all loan originators need to be licensed.
"We believe there should be a barrier to entry besides being able to fill out a job application form," said Michael Faust, CAMB's government affairs chairman.
Sounds pretty good, doesn't it?
Not to be outdone, the California Mortgage Bankers Association, fired a shot across the bow of the brokers' association with this statement refuting their demand today.
Dustin Hobbs, spokesman for the California Mortgage Bankers Association, said his group objects to the licensing measure, saying that Department of Corporation licenses have better consumer protections."Employees", he said, "must receive training before they can set up loans for homeowners, and their employers undergo regular audits and must meet minimum capital requirements."
The bankers make a pretty good case, also. They are held to higher regulatory audits than DRE licensed brokers.
What about the federally-chartered banks? Federally chartered banks are exempt from state licensing and these guys are conspicuously absent in their comments. The banks will never encourage their employees to get originator's licenses because it makes their originators marketable. Why should they? The federal banks don't play by the same rules as the rest of the originators anyway !
Are there close to 1 million people originating loans in California as the mortgage brokers suggest? I think not. That would be one originator for every 38 people in the state or one originator for every ten familes. I think this is just another protectionist ploy by an organization with declining membership. The press release also calls for new disclosures for "exotic mortgages". Remember this is the same organization who encouraged lenders who offer 100%, stated-income, negative amortization loans, to exhibit at their San Diego trade show.
I think this is CAMB's last straw to show its declining membership that it has value.
Comments(12)