If 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!
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: