King For a Day Series – Mortgage Industry

By
Managing Real Estate Broker with eXp Realty RB-19250

King For a DayIf I were king for a day what changes would I make to the mortgage industry to better protect the public?

I have read thousands of news articles, blog posts and sat through many hundreds of hours of training and meetings through our industry.  As a result I have formed some very strong opinions about changes I would love to see in our industry.  I have decided to write a small series of articles that will pick on several parts of the real estate industry.

First I would insert more accountability into the process. 

For a start I would require that each and every lender and loan officer must be licensed in any state they do business and make a minimum set of standards that each state needs to require.  In Hawaii we have out of state loan officers and lenders doing really bad stuff and then vanishing.  No accountability for the mess they make.

A few more things I would add to the list:

  • A Code of Ethics.
  • Require errors and omissions insurance.
  • Simplify the process for filing complaints against loan officers.
  • Add educational requirements to get a license. (In Hawaii no educational requirements)
  • A license exam to prove they have the required knowledge
  • Add continuing education requirements to renew a license.
  • Nationally recognized designations, letting the public and others in the industry know if that loan officer has professional development.
  • Not allow loan officers to sell homes, home owners insurance or do home inspections.

Maybe this one would be hard to enforce, but I would give all loan officers a sense of urgency.  I would also require they return phone calls on a timely basis and follow the purchase contract timeline.

A good start would be if the lending industry had something similar to the Association of REALTORS® that gave the public an avenue for filing grievances and a set of industry standards that would be a good start.

I run into many loan officers who have no idea what is legal or ethical.  A large number of loan officers are running around with absolutely no training and have no idea what they are doing. 

For example I have gotten loan approval letters on several occasions for buyers who are not qualified at all.  I have also gotten and heard of many offers on listings that would have been mortgage fraud.

We are speaking about the folks who are dealing with the funding of the biggest purchase in most people's lives.  What happens here will have a giant impact on the financial future of these buyers.  Not to mention the harm they do to sellers who have taken their homes off the market for a buyer who may not be qualified to buy their home.

In recent blog posts I read from others how some of the primary lenders are now tightening their standards for brokers who do business with them.  Some thought that was a bad thing.  All I can say is:  It is about time!

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PS:  I did delete a couple of responses from this blog post.  One from an individual who wrote his own blog post much longer than this one, in what appeared to be an attempt to hijack my post.  Another from some unidentified person who appeared to be him or a friend of his that posted a long continuation of his comment.

For those detractors who seem to protest the loudest about adding professionalism and added protection for the public; I have only one thing to say.  You do protest much too loud.  If I were King For a Day, these changes would happen!

 

 

 

Other King For a Day blog posts:

Posted by

 

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Randy L. Prothero, REALTOR®

Principal Broker, ABR, AHWD, CRS, e-PRO, GRI, MRP, SFR

Island Style Realty Inc.

Team Leader - "The Prothero Group"

Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers.  His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.

Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) Performs mediations and ombudsman services for the Board of Realtors.  To improve overall professionalism in his area Randy also offers classes for real estate agents. 

www.HawaiiRandy.comOahu (Honolulu County) Property Search  Hawaii Military Relocations

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Ambassador
1,086,976
Celeste "SALLY" Cheeseman
Century 21 Liberty Homes - Mililani, HI
(RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE

Tom...it's not a nono if someone tells you go right ahead...common courtesy. Otherwise, guidelines are there to prevent blatant advertising/soliciting.

On the present topic...ongoing I see. How come no one is harping on the home inspector post and the handyman post?

You better get the real estate agent one up.... then we all can harp on it :) 

There are good and bad in all industries....duh. It's going to always be an issue when a BUNCH mess up ...not a few....a BUNCH.....and so the reason the real estate industry is always in the media ....and that includes ALL of us. So...higher standards for all...and let's see who lasts when they have to conform. 

 

Oct 30, 2007 06:49 AM #55
Rainer
3,740
Tom Cunningham
Agent Support 360 - Austin, TX

Randy, I stand corrected. Thanks for your comments.

Sally, Gotcha.

Oct 30, 2007 06:55 AM #56
Rainmaker
652,448
Randy Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645

Sally - I just put up the escrow officer one.  The real etsate agent will be up in the next day or so.

Tom - I look forward to reading your post.

Oct 30, 2007 08:21 AM #57
Ambassador
527,057
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life
Like I said Randy, you wouldn't be a bad King at all in my book:-)
Oct 30, 2007 08:48 AM #58
Rainmaker
652,448
Randy Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645
Jason - Thank you.
Oct 30, 2007 11:36 AM #59
Rainer
30,910
Scott Blanchard
Mortgage Force - Newtown, CT

I read some but not all replies so I am sorry if I am repeating but LO like Realtors do have designations

•·    Certified  Mortgage Consultant(CMC)

 NAMB's most prestigious certification. Requires at least five years 

 industry experience and a minimum of 100 qualifying points

 

•·    Certified Residential Mortgage Specialist (CRMS)

 Requires at least 2 years industry experience and a minimum

 of 50 qualifying points

 

 

•·    General Mortgage Associate (GMA)

     Entry-level certification. No prior experience needed.

  

Oct 31, 2007 08:09 AM #60
Rainmaker
652,448
Randy Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645
Scott - Those are a nice start, but don't they only apply to the Mortgage Brokers?  What about the primary lenders?
Oct 31, 2007 10:20 AM #61
Rainmaker
310,444
Brian Brady
San Diego VA Home Loans/858-777-9751 - San Diego, CA
858-777-9751

The Mortgage Bankers Association has designations, also.

The Financial Planning Association recognizes the Certified Mortgage Planning Specialist Designation.   Some of us have or are studying for the Certified Financial Planner designation; that requires more education than what a real estate broker license does.

All designations have a code of ethics attached to them and offer the "central registration" you want; you don't need the government to increase your professional knowledge, Randy- just do a little research. 

Nov 03, 2007 09:46 AM #62
Rainmaker
652,448
Randy Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645

Brian - Some of us are studying?  How did that solve the problem of protecting the public?

There is a Code of Ethics attached to those designations?  How many have that designation?  How does that effect the overwhelming majority of those who do not have the designations.

You are talking about optional training.  Unfortunately only top professionals seek that out.  Issues I have with the lending industry is not pointed towards them and you.  I know you have a great reputation in the business.  That is the not true of a large number of agents I have run into and the public are being preyed upon by.

I am not a bigger government kind of guy in most issues.  This not one of them.  I feel government is the entity that should protect the public in this case.

Nov 03, 2007 06:14 PM #63
Rainmaker
310,444
Brian Brady
San Diego VA Home Loans/858-777-9751 - San Diego, CA
858-777-9751

Some of us are studying?  How did that solve the problem of protecting the public?

The public protects themselves.  That's the beautiful thing about America; you have the inalienable right to be an idiot.

There is a Code of Ethics attached to those designations? 

All of them...click the links.

How many have that designation? 

Who cares?  All you need to do is deal with the originators with the designations.

How does that effect the overwhelming majority of those who do not have the designations.

Again, who cares?   Everything you asked for is available, already.  If government offers a licese with low standards, a consumer may mistake a licensed person for a professional- that's the argument against occupational licensing.

Nov 04, 2007 03:44 AM #64
Rainer
130,664
David A. Podgursky PA
THE PODGURSKY GROUP @ Re/Max Direct - Boynton Beach, FL
THE PODGURSKY GROUP - Make the Right Move!

Just partner with your best Mortgage Professional colleagues and tell your clients that here are HONEST people that NEED to be involved

you can't coerce... but you can be emphatic!

 

Nov 04, 2007 03:49 AM #65
Rainmaker
652,448
Randy Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645

Brian - I guess we will agree to disagree.

The lending industry has proven to not want to or be able to police themselves.  The amount of harm they continue to do to the general public demands action to be taken.

David - I do that now, but that does not remove the problem elsewhere.

Nov 04, 2007 06:03 AM #66
Rainmaker
288,411
Kathleen Lordbock
Keller Williams Realty Professionals - Baxter, MN
Keller Williams Realty Professionals

I can not make you King, but I knight you Sir Randy!

All good points to ponder.

Brian says- 

"The public protects themselves.  That's the beautiful thing about America; you have the inalienable right to be an idiot."

but I say - 

Americans do have a right to be idiots and many are, but we do need to have laws or standards to protect the idiots from being taken advantage of. 

Nov 11, 2007 01:48 PM #67
Rainmaker
652,448
Randy Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645
Kathleen - I agree, but some of these loan officers need to be stopped from what they are doing.  There is no way for the general public to know what they are getting into until it is too late at times.  Also if they get stuck there is little recourse in many cases.
Nov 11, 2007 02:09 PM #68
Rainmaker
288,411
Kathleen Lordbock
Keller Williams Realty Professionals - Baxter, MN
Keller Williams Realty Professionals
Randy - I was also agreeing - the industry is in a big mess right now and a good deal of that was from the naive being taken advantage of and not truly understanding the maybes that could and did come.
Nov 11, 2007 02:42 PM #69
Rainmaker
652,448
Randy Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645
Kathleen - I just hope that the fixes being imposed will help and not hurt consumers.
Nov 11, 2007 06:38 PM #70
Anonymous
Not Yet Licensed

I agree a lot of the bad loan loan officers are leaving or left.  When the market returns, they will all jump back in again.  Hopefully there will be better standards in place before that time.

Hi Randy,  

This is very interesting.  Is there any progress being made on standards?

Jul 15, 2008 08:40 AM #71
Rainmaker
652,448
Randy Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645

None that I am aware of locally.  The feds are tightening lending, but that will only effect qualifying of borrowers.  The bad behavior of loan officers will go on.

Jul 15, 2008 04:05 PM #72
Rainer
125
Chris Goegan

I go thru ur all articles...all are informative...great randy :-)

 

financial advisors california

Jul 26, 2012 06:27 PM #73
Rainmaker
652,448
Randy Prothero
eXp Realty - Mililani, HI
Hawaii REALTOR, (808) 384-5645

Chris - Thank you

Jul 26, 2012 08:34 PM #74
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Hawaii REALTOR, (808) 384-5645
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