Seven states launched a new mortgage broker tracking process in hopes of weeding out any unethical mortgage brokers jumping from one state to another after their license has been suspended or revoked in a particular state.
In the publics' eyes, mortgage brokers hold the biggest blame when it comes to the mortgage meltdown that began in 2007. The new tracking system is just another effort for law makers to tighten national standards and hold individuals responsible for their actions.
The new tracking system creates a uniform application for mortgage brokers that allow banking regulators keep tabs on unethical mortgage brokers from bouncing from state to state. By 2009 consumers should also have access to the database.
The seven states participating in the launch of the tracking system include Idaho, Iowa, Kentucky, Massachusetts, Nebraska, New York and Rhode Island. Another 42 states have committed to joining by the end of 2009.
The state system applies to mortgage brokers and loan officer at state regulated banks, but employees at nationally supervised banks are exempt. Howard Glaser said "To have true uniformity, you would need to have a federal rule. It shouldn't make a difference where you live."
A bill passed by the House in November requires all states to participate in the tracking system and also mandates that criminal background checks shall be ran on everyone involved in selling home loans. Mortgage brokers and loan officers will also be required to take educational courses and complete a written test.
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