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King For a Day Series – Mortgage Industry

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!

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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 Randy L. Prothero - Hawaii REALTOR® on 10/28/2007 02:38 PM

Comments (72)

real estate etchics, real estate, hawaii, mortgage, loan officer, lenders

Originally posted at: Hawaii Randy's Real Estate Opinions: King For a Day Series – Mortgage Industry

This post has been included in Hawaii Information

72 Comments on King For a Day Series – Mortgage Industry

OCT

2007

I'm first...I'll be back. (people keep doing that on mine so thought I'd make you feel special ha! :)

We are speaking about the folks who are dealing with the funding of the biggest purchase in most people's lives.

With that profound statement I am going to agree. This post is not attacking nor demeaning so I KNOW there aren't going to be attacking statements after this.

In any case, you are correct. There is no recourse for out of state anybody and I say that if I were to have a choice or we could vote on this I would vote for this one: no one can do business here without being licensed and insured here.

Everyone in the real estate industry should have the same standards of practice.....and if people disagree I would hope they would give reasons why it would be sooo hard to follow? I mean, if everyone is doing the right thing then they should have no qualms about doing business with ethical and professional guidelines as well as being insured and such.

Great points here Randy!

Randy,

All I can say is ...wow!

Randy, a well thought out post!!! Wouldn't it be nice if all the states had the same high standands of practice???

Good Post!!!!!

I sure do agree Randy. Sometimes I feel we as Realtors know more than the Loan Officer as to what will bite you 2 days before closing. Isn't it funny, how some Loan Officers will start calling about things needed from the buyer or seller just prior to closing?

What is going on?

Jeanette Hemmer, Re/Max Clarksville, Arkansas

Sally - Thank you for the comments. I am sure there will get detractors from my point of view. Most will be those with business practices that I do not agree with.

Neal - Thank you

Joeann - I agree. I am not just going to pick on loan officers. I will be picking on real estate agents and other professionals in our industry.

Jeanette - That is because they take so long to send the loan to underwriting. By that time they are already blowing our deadlines and putting the transaction at risk.

The loan officer that do that are usually the same ones who come back with a higher rate or higher closing costs for the buyer once they are backed in the corner for time.

I'm glad you will be picking on other parts of the industry including Realtors(R) ...I welcome it.

Neal - Mortgage lenders do not have a monopoly of needed improvements. There are other parts oif our industry that even worse. Stay tuned. I picked on them first because they seem to be doing the most harm and they are in the news the most lately.

Can I be President for a day....I would love that.

Well said my friend...if only your wishes would come to fruition!

Randy, these seem to be very reasonable request to me, I for one would welcome them. If someone has a problem with the accountability that you are asking for, then I would be very careful about doing business with them.

The Mortgage Company that I work for continuously provides training for us, and holds us accountable for what we do, but I think that this has to be done on a wider bases and standards set in place which can be monitored.

Carl:

You are a man after my own heart. Occupational licensing gives a false sense of security to the consumer.

Randy, you wrote:

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.

Can you give me some specific examples of the bad stuff that Mainland originators have done that hasn't been done by an Island originator? What, specifically, is "bad stuff" ?

Christy - President wouldn't be as fun. You have to deal with congress and the courts. :)

George T. - Real estate would be a lot more civilized and the public would be safer.

George S. - I stick with companies who are professional and ethical in their dealings the rest I try to avoid.

Brian - How about the moved on to the next deal and not have to answer to the state regulators. I have seen more dirty deals than I can count. Some from local lenders many more from out of state loan officers.

The biggest difference is the locally licensed ones fall under our state Department of Commerce and Consumer Affairs and are subject to our local laws, the others can only be chased through Federal avenues. Not something the average consumer will take the time to do.

OCT

2007

Randy, I'm looking forward to the Chapters in your King For A Day series in which you address:

1. Wall Street investment banks who created the Low Doc/No Doc/ Lie Doc/ High LTV culture that invited all the abuse, by buying all they could get their hands on as fast as it could be originated. In the mid 90's they figured out how to play pass the hand grenade and played it to it's natural and only possible conclusion. The good news is, it was that easy access to credit that fueled the boom. You'll admit that much, won't you?

2. The culture of greed, in which consumers who were looking for a safe haven from the tech bubble got the bright idea that Real Estate was a liquid asset. Wonder where they got that idea?? Not from lenders. I'll leave it at that.

3. Realtors who aided and abetted mortgage fraud by encouraging buyers to lie about income and occupancy in order to obtain financing that they didn't qualify for, all the while pointing to what a "great investment" they were getting and what a "steal" it was and how many of their clients had attained the dream of wealth created by investing in real estate. Untold fortunes were there for the taking. All you have to do is... get a loan..

4. The commoditization of mortgage financing by the likes of LendingTree et al, who flood the air waves with commercials that make lenders look like schmucks and promoted the low bid mindset and resulted in mass bait and switch campaigns and deceptive advertising and trade practice, in the name of survival. "People are Smart, try our 'No Cost Refi'" Gimme a break...

5. Loan officers who heard the Realtor on the other end of the phone say "You get this guy a loan, or I'll get somebody who can" and didn't reply "You know, I just don't need your business that bad".

Which leads me back to that game of "Pass the Hand Grenade"... There are a lot more complicit parties in this mess than I've heard you implicate up till now.. You may utter a brief dismissive once in a while about how, "your industry isn't completely blameless" or words to that effect.

But mostly, I've heard you railing on lenders.. "because they seem to be doing the most harm" I'd say that is debatable. I bet there are a lot more people choking on real estate they can't sell, because a Realtor talked them into it, not a loan officer.

As I said, I'm looking forward to the next part of the series.

I have seen more dirty deals than I can count.

What, specifically, made them "dirty"?

I have seen more dirty deals than I can count.

What, specifically, made them "dirty"?

My question would be, did you hold up closing because you thought the loan terms were usurious and unsuitable or did you let them go ahead and close and fund and collect the commission check?

Tom:

Your question should be directed at every Realtor who calls for lenders to be licensed as fiduciaries. Why license us when the Realtor is bound to look out for their clients' best interests? It seems redundant.

Geez. I think George has the right attitude.

I'm happy that lenders are tightening up. I've met too many young guns who have spent the last 3 years cashing in on the ease of loan approvals through subprime lending, when they were barely qualified to work drive-thru at McDonald's. It's now more challenging to get approvals, and that's just what the industry needs.

Well, first of all, I didn't say I had a problem with that part of Randy's blog. I have no problem with and agree that licensing should be required for Originators. In fact, I think the test should be MUCH MORE DIFFICULT. I had to take the Series 7 Securities in 1984 as an SEC requirement, when I started trading mortgages in the secondary market. Now THAT was a test. Actually took it twice... The first time was the morning of my wedding day, after a bachelor party that went until 5:30am.. Funny story... Anyway... The LO test is a joke..

Second of all, Lenders ARE fiduciaries, as defined by Websters : "One, such as an agent of a principal, who stands in a special relation of trust, confidence, or responsibility in certain obligations to others." If climbing into a guy's credit report and tax returns and bank statements and 401K accounts isn't a special relationship of "trust, responsibility and confidence", I don't know what is...

And third of all, I work for a very large mortgage bank who is a direct Agency seller, not a correspondent or wholesaler, and who are extremely serious about staying that way. Continuing Education and Compliance are not taken lightly. (I was grumbling about a couple of training modules I had to finish on Saturday as a matter of fact, and the funny thing is, I actually learned something and I've been at it since May 29, 1984.)

Looking back at his list, I can't see a single thing that I disagree with. (Especially love the one about not letting "loan officers sell homes" and think it's quite humorous that he worded it that way, instead of "not allowing Realtors to try and be loan officers too")

My only point which you commented on was that in all the belly aching and moaning about those rat bastard lenders and their unsuitable loans junk loans, there was a Realtor sitting in the closing, who heard the loan terms explained by the Closer and didn't say a word. Just picked up there check and went on their way.

"I'm happy that lenders are tightening up. I've met too many young guns who have spent the last 3 years cashing in on the ease of loan approvals through subprime lending, when they were barely qualified to work drive-thru at McDonald's. It's now more challenging to get approvals, and that's just what the industry needs."

Amen Brother!!!! Lot's of low hanging fruit now no longer within reach of the little squirts

Second of all, Lenders ARE fiduciaries

That's wholly incorrect. Lenders can never be fiduciaries. Loan originators can but lenders can't be. The whole crux of HR 3915 is to define that very duty.

Randy, would you prefer your fiduciary duty to be usurped by the originator's? In fact, if HR 3915 is passed, the responsibility may very well be deflected to the loan originator for the client's well being. This means reduced commissions to the real estate agent.

Spoken like a broker (and possibly a lawyer too?). My bad for speaking to the spirit of the accountibility, and not splitting hairs... OK, an Originator should consider himself a fiduciary... I don't know, I read 3915 and didn't see anything all that unreasonable in it. In fact, I didn't see anything that we don't already practice. I know things are different all over, and there are some fly by nights and bucket shops who this would put out of business (and I'm OK with that), I'm just saying in MY world, there isn't anything, that I saw anyway, that isn't already a Best Practices Policy.

Now, not to hijack the thread, and this will be my last post on it, but, I gotta say this.

First:

"Why license us when the Realtor is bound to look out for their clients' best interests? It seems redundant."

It's only redundant in the sense that you're interpreting it.

"Randy, would you prefer your fiduciary duty to be usurped by the originator's? In fact, if HR 3915 is passed, the responsibility may very well be deflected to the loan originator for the client's well being. This means reduced commissions to the real estate agent."

Dude, you're: A. Hanging an ambiguous concept out there and using the fear of lost power and lost earnings as means to inlist support. And B. Using the word "fiduciary" in an omniscient sense, indicating that it has uniiversal application, when it doesn't.

A Lender (oops.. sorry... An Originator's) fiduciary responsibility should be to scupulously evaluate the borrower's financial condition and use the findings of that evaluation to determine the financing options that those loan programs that are in line with his best interests. 1. Can he afford it? 2. Which method of financing is the most cost effect over time?

A Realtors fiduciary duties should require him to evaluate the transfer of property transaction. 1. Is he paying too much (or selling for too little) in comparison with similar property? Are the terms of the sale in accordance with his best interests? 3. Does the property have known defects, good schools, low crime? Is the area on the rise or in decline? Etc..

Separate parts of the transaction. Separate fiduciary responsibilities. As much as Randy gripes about Pre Approval letters that are worthless, I would think he would appreciate an Originator who was straight with him and said "This guy doesn't qualify." so he could move on to someone who is.

If you're suggesting that Randy would rather make a commission by selling a house to someone who really can't afford it, without regard to what's in his best interests, than to wait until a qualified buyer comes along.. I think you have the wrong guy..

Randy I think that this is a good place to start, but on an education basis and systems basis it needs to go way beyond your recommendations. Lincensing should be mortgage specific and not just require a real estate license like in California. What a joke. The California Real Estate Licesne teaches you nothing about doings loans. We as mortgage professionals need to steer this before the jokers we call legislators pass something harmful to everyone, including consumers.

Tom - It seems like you have a lot to say on the topic. You should write your own blog post and not try to hijack mine. This blog is about my opinion and not yours.

If you had read some of my previous posts I have not been kind to bad real estate agents, bad loan officers, bad clients, bad appraisers or inspectors.

I have written several posts on professional behavior that got me just as many negative responses from real estate agents and others in the real estate industry. This is the first in a series I am planning to write over the next week or so. Stay tuned to see who the King picks on next.

I can say one thing. Those who speak out the strongest are the type of folks I would probably never want to do business with or ever refer a client to.

Brian - I absolutely disagree with you on the topic of licensing and fiduciary. Loan officer are handling the financing and should be held to just as high of a standard as real estate agents.

The real estate agents can not completely protect a client from a dishonest or bad loan officer. We do not see the client's confidential information and are not privy to what is going on between the client and the loan officer. This is an area where the local regulatory people need to be more active. Without a license they do not have the same ability to intercede on the publics behalf when dealing with loan officers.

I have no idea what you were talking about in regards to the reduced commissions to the real estate agent. My commission is based on what I negotiate with my client. The lender has nothing to do with that.

I find most of what you are saying helps make my argument. After reading some of your responses you leave me and I am sure many who read your responses left feeling the need for additional protections for the general public.

I know I for one do not feel safe from predatory and dishonest business practices of some loan officers and lenders.

Kate - Very well said.

For Brian and Tom- Who have asked for specifics and bad loan officers and bad transaction. Give me a break. I have written several blog posts on that topic ad received similar responses from loan officers who have caused me to loose respect form them over their comments. This blog post was about what I would do to improve the part of the industry.

I have also written several posts about why real estate agents should not do loans either.

Randy, you are absolutely right. Illinois, where I live, just put in a licensing requirement 2 years ago. We do need higher standards, however, I think the market is going to do a lot of the work for us. Since the sub-prime implosion a lot of the problem LOs have left the business, and with the market slow, the people who jumped in because this was easy money will be gone, and most of those who are left will be the ones who treat it as a profession. At least that's my take on it.

Peter - 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.

A lot of great ideas! Code of Ethics, E&O insurance, license exam, continuing ed, etc. These would all make the industry more trustworthy in the eyes of the public.

Randy,

I agree what you said about how we are not able to see the confidential information that the buyer gives the Loan officers that are handling the financing and should be held to just as high of a standard as real estate agents. My question is should the LO be responsible for if the buyer paid too much for the property?

In a way yes..but the buyer is also as responsible... what about the appraisal? Who contracts the appraiser? Not us. We do not appraise the property...and when it goes under review and passes a satisfactory appraisal then the Realtor should be responsible for that too right? Nope..

We show the buyer the comps and then they make a determination on what they think they should offer.

I do not ever manipulate a buyer to pay more..we advise them but don't stick a gun to their heads.

But all in all when a commitment date is given and delivered and then a deal falls through then what? Most people in the public probably think when they get the commitment that it is done. Ive seen commitments die after and leave unhappy buyers and sellers sitting and wondering why they were promised and then someone comes up with lame excuses not to close. I had one recently....stalling and mass extensions. One reason was they had to send all the documents back because they spelled the buyers name wrong and they needed 5 days for one letter to be fixed?...and in the end it was just another stall and lie and they didn't close and we never received a denial letter. When we requested one..the LO officer cursed me out on the phone and hung up. But that was really professional of them. I'm collecting escrow now for my clients due to inaccurate information on timelines not being met and Realtors who fail to follow those timelines. So both should be at fault and they are losing clients and now buyers are upset they just lost their deposits due to this. When all goes wrong..they are not a party to the contract...well that might be true in a way...but there is a fnancing clause in the real estate contracts...so who is a party to that clause where it says the type of mortgage and the rate they are getting?

This goes out to the all the LO's MB's... or any incompetant Realtors...title companies etc...if they have a problem...all we ask is for a little honesty and communication. I do not care what your name is...do the job and do it to the best ability you can but all should still have to be held accountable.

The bottom line is the Realtors are not the ones giving the buyer the loan and we can only control our end ...but when we can't get someone to call us back that is ok too right?

"You should write your own blog post and not try to hijack mine. This blog is about my opinion and not yours. "

As I said earlier in my last post, I didn't intend to HiJack your blog.. In fact, I was largely DEFENDING your position against Brian, which is why he took issue with me in the first place..

Please be patient with me, as I'm new, not only here, but at this whole blogville thing and am learning how you folks operate. And no, I haven't gone through and read your blogography as it were. Glad to hear you're even handed in your assessment of nefarious characters, regardless of the role they play.

"For Brian and Tom- Who have asked for specifics"

That was Brian, not me. I asked if you ever held up a closing, because you thought the loan was innapropriate. I think that's a fair question, but it is afterall, your blog, Your Majesty. I submit to your sovereignty. :-)

Calm down now..... :)

I still agree Randy.....EVERYONE in the industry needs to be licensed.....Tom...onward to his next series. WooHoo!

Lisa - I am amazed how many in the lending side do not want these things. I want to see them stricter on our side of the business. I think all professionals feel that way.

Neal - Please tell us what you really think. LOL We have similar issues with the real estate agents and everyone involved in the transaction. the difference is accountability. I have recourse against another real estate agent and so does the public. Not so with loan officers in many cases or most cases.

Tom - Sorry if I misunderstood about the specifics. We have had closings delayed and cancelled because of the loan officer or the lender pulling a bait and switch. The loan comes in late. The buyer is painted in the corner already in breach of contract or about to be. The actual loan they get does not even resemble the GFE (Good Faith Estimate).

I have had two recently fall out of escrow where I represented sellers and the loan approvals were bogus. Both after being in escrow for more than 30 days. In one case the loan officer called and verbally said we had final loan approval, to find later it was a dead deal when I chased them for a copy of the final loan approval per our contract. In the other case their pre-approval letter stated that it went through underwriting and they verified the buyers funds. The buyer did not have any funds and their credit was rotten. That loan officer was from out of state and we next to no recourse.

Sally - Amen

"The real estate agents can not completely protect a client from a dishonest or bad loan officer. We do not see the client's confidential information and are not privy to what is going on between the client and the loan officer."

Then you're really not operating as a "fiduciary"; you're a "transaction broker" looking to protect a client's interests specific to the transaction. I have no problem with loan originators assuming the role of fiduciary, we're better suited to advise clients because we possess that confidential information. So, if real estate agents are unwilling to assume the role of financial adviser, loan originators can.

If real estate agents want to truly be fiduciaries, they must learn financing and financial planning. Merely protecting a client's specific interest in a contract negotiation does not make you a fiduciary. If I were an agent, I'd want to embrace more responsibility for the care of a client, like Lenn Harley rather than pawning off that duty to an inexperienced bank rep.

PS: Tom- it's no "scare" tactic; it's reality. Frank's bill will costs the consumer a ton of money.

Randy, you're updated paragraph, at the end of your post, is a fallacious argument of "affirming the consequent." It says that if I protest your conclusion, I must not want to increase professionalism and consumer protection.

Your conclusion is incorrect. Licensing, designations, and a code of ethics do NOT protect the consumer. Used auto dealers have licensing and a code of ethics. All that has done is drive up the costs to the consumer; it certainly didn't add professionalism nor protection.

and this is the fallacious argumentum ad hominem; instead of disputing the legitimacy of occupational licensing, you attack my business character for simply trying to point out the false promise that comes with licensing.

Congratulations on stifling an intellectual discussion

Brian - I am trying to keep it friendly, but sir you are totally off the wall. I completely disagree with your arguments.

Having a regulatory agency to go after dishonest and incompetent loan officers and lenders is a good thing. Having a code of ethics and standards is a good thing.

You have no idea what a fiduciary is from your comments. I will keep it simple. By law I am a fiduciary, I do not have a choice on this matter.
By law I can not give financial or legal advice. I am licensed to sell real estate only. I will not respond the any legal arguments or Latin terms. I do not know Latin and did not join the local bar association. Stop trying to impress us.
In Hawaii there is no such thing as a transaction broker, by law.
The are no false promises here. Right now we have next to no protections for consumers. I am saying we need to add some. After your many complaints, arguments and accusations I still have not heard how you would solve this MAJOR problem.

For some reason my opinion on improving professional standards, and giving the public more recourse against someone who could do them a tremendous amount of financial harm; seems to hit a nerve with you. I do not hear the same type of response from most of the professionals I deal with on a daily basis. They welcome such improvements, and have even lobbied our legislature just as I have for those improvements.

We as professionals should be held to a higher standard.

Hey Brian, How does busting out in Latin work for you in your personal relationships? ettypray obnoxiousway

Tom - :)

OCT

2007

And last but not least........

We as professionals should be held to a higher standard.

Sally - I include you in that category.

Which one...the cha cha group.....lol! (I know you cracked up at the baby)

Sally - The professionals of course. :) I thought the dancing baby was retiured from the internet. I haven't seen that in awhile.

Randy,

The bottom line is when we write a post about unprofessional Realtors(R) they do not read or pay attention to that. When we write about an inspector or a handyman...they do not read about that. When we write a beautiful post about someone we worked with in their industry they do not react to that. I have seen no response on a positive post that leads me to believe they read them. But ...of course any post with that word in it...becomes an attack with an attitude problem. No matter what we say it will always come back as a complaint when we should be looking for the solution so we can all work together..but of course there is always some sort of personality conflict. No matter what you trade is..if you do something wrong you should be held accountable. They need us as much as we need them. What a fine piece of craftsmanship we have here!

Randy, as you said yesterday, I have a lot to say on this subject and because I've come to respect your professionalism I'm taking your advice and starting a blog of my own, because I don't want to come across like I'm trying to hijack yours, although I would like to reference it if you don't mind. I hope you'll read it. In fact I hope you all will read it because I value your opinions. TC

Neal - I am always amazed how defensive some folks get when I reference professionalism or improving public protection. That tells me and should tell the public that we definitely need to tighten standards.

Tom - No problem. Link away.

Please forgive me if you've "moved on" and I seem to be belabouring the point, but as I gather my thoughts to follow your lead with a blog of my own, I wanted to offer one last point for you to ponder. Actually, I would have defaulted to sending you a direct email, but I read Sally's blog about learning the rules and it seems as though that's a big "no no". Aside from the integrity and accountability issue, which I agree with you on 100%, here is what I would truly appreciate your thoughts on.

As a chess player, it would seem logical that strategic thought would be high on your list of things that you aspire to and that analizing cause and effect would come naturally to you. Randy, I looked at your website and noticed that you are showing 37 mortgage companies on your website and posting their "current rates". You've put those "vendors" in a bidding war and forced them to work either cheap or not work at all. When you emphasize price and remove service from the equation, you're telling your customers that service isn't important to you and it shouldn't be to them. So, as a chess player, look four or five moves ahead into the game. Anticipate the inevitability, that you won't get what you encourage your customers not to pay for. Kind of like going to Sam's Club. I was surpised the first time I realized that not only did they not bag my groceries, they didn't even have bags! Now I'm used to it.

If you would put yourself on the other side of it you might realize that while you might be willing to write a contract for $200 bucks, it's not something you're going to put a lot of time and energy into.

On the other hand, if you found one or two LO's who took pride in their jobs and reputations, and you said to your customers, "These are my guys. They are my preferred lenders. I know them and trust them and I know they'll treat you right", I would bet my last nickle that 90% of your problems with "the mortgage industry" would disappear. Because an LO who still takes pride in his job (after all the LendingTree commercials), will take a bullet before he'll let down a Realtor who believes in him. It's human nature.

Tom - The link you are referring to is from our Board of Realtors. Just below is my services directory of the vendors I recommend. I am updating that as we speak and will have the new updated one up later today.

The reason I link to the rates is not to cause a bidding war, just the opposite. It shows my clients that the rates which fluctuate daily are almost the same from one major lender to another. It actually has the opposite effect. My clients almost always gravitate to the good loan officers that I have had great experience with.

Wowsers!!! Certainly a heated debate/discussion and I'm certainly not going to stir the pot any further. While I don't agree with some of these wholeheartedly, I truly think Randy would make a pretty darn good King in his own right. To keep it simple, I'll concentrate on something simple:

Not allow loan officers to sell homes, home owners insurance or do home inspections. (Abso'freaking'lutely!) My only question is would you extend that to all other sides of the transaction Randy? Example, Realtors who are doing mortgage loans?

Jason - Absolutely! I have written several blog posts about the evils of real estate agents doing dual services. The King For a Day Series will include real estate agents. I am sure the mortgage guys are waiting for that.

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.

Randy, I stand corrected. Thanks for your comments.

Sally, Gotcha.

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.

Like I said Randy, you wouldn't be a bad King at all in my book:-)

Jason - Thank you.

OCT

2007

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.

Scott - Those are a nice start, but don't they only apply to the Mortgage Brokers? What about the primary lenders?

NOV

2007

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

2007

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.

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.

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!

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

2007

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.

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.

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

2007

Kathleen - I just hope that the fixes being imposed will help and not hurt consumers.

JUL

2008

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?

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.

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