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Colorado's New Mortgage Broker Law Bans 10 LOs

Like Washington State, Colorado's new mortgage broker law, the Morgtage Brokers Registration Act, went into effect January 1, 2007. All ready, they have banned 10 mortgage brokers according to the article in the Rocky Mountain News.

Will Washington State be banning unsavory brokers? We'll have to wait and see.

I'll keep you posted.

Posted by Rhonda Porter CMPS on 01/18/2007 10:01 PM

Comments (15)

loan officer, mortgage broker, colorado, washington, law, legislation

This post has been included in Colorado Information
Post is included in group: Mortgages
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15 Comments on Colorado's New Mortgage Broker Law Bans 10 LOs

JAN

2007

Thanks for the post, I haven't seen the article. I hope this new law makes a few lenders run and hide. The list in the Rocky News didn't have any from Pueblo and that surprises me!

I bet the list will grow since it's still in infancy, like Washington. I hope Colorado inspires Washington to be tough on preditory lenders.

The new law has no teeth. It just registers LO's not licenses them. The bad actors continue to play.

ho hum.

10 down and hundreds to go i bet.

i would love to see the regulators tighten things up.

KK,

Hats off to you...I've been reading your blogs. What do you think about printing the 10 names? When I did the CE class for LPOs in WA, they cheered when I announced this article. BTW I really dislike the term "register"...sounds like WA's sex offender laws. And in WA brokers will have to have their license numbers next to their names on all loan aps, advertising, web sites, etc.

JAN

2007

In California we have two different licenses one is a California Finance License (CFL), with this license only the coporation is licensed. Then we have the Department of Real Estate (DRE) License which requires background checks, finger printing, continuing education etc. Most of the fraud in our state is directly tied to the CFL Lenders and those DRE Brokers who work as Brokers for Hire.

There is no doubt that a cleaning of house is needed in our industry but, at what cost and expense to the little guy like me? It's already expensive enough to do business. I think most of the licensing legislation is coming from the national finance companies (Countrywide, WAMU, BofA, etc) trying to put the little guy out of business.

JAN

2007

Registered CO mortgage broker here, and this will be only the first step for CO! Regulators are realizing the bill has no teeth, no real avenue for enforcement, plus it lets bad brokers who happen to have FHA status off the hook (not to mention bankers). Because the responsibility for carrying registration out falls to an already swamped Real Estate Commission, this will do little but put money into the state coffers for the registration fee. I highly doubt fraud or bad brokering will lessen much, and CO unfortunately will continue to lead the country in foreclosures!

Hi Jeff,

I'm in the same boat as you. I'm a licensed mortgage broker and, like CO, WA let's the bankers and credit unions slide on by the law too. I guess they have more lobbying power than WAMB?

Here in Minnesota, they are looking at a new 'minimum net worth' idea for Originators....to get an Originators License, you would have to show a 1.5 million net worth outside of your business to get one. People who work for a licensed originator don't have to show anything, but it would put A LOT of smaller shops out of business.

Our Association of Mortgage Brokers is trying to get the net worth reduced to a manageable $250,000 outside of business, plus simple licensing for anyone who does a loan application. We're hoping that gets rid of more 'bad apples'.

JAN

2007

Rhonda,

It is about time that these states did something. While the "registered" term relates to the sex offenders, I am sure there are a lot of mortgage professionals that "rape" the borrowers also. That is evidenced by the immediate ban on 10 in Colorado.

JAN

2007

The comments by Jeff Tompkins are probably right on target. At least the ball is rolling on Mortgage Brokers. It's almost inconceivable that it took this long to enact legislation.

It's inconceivable that anyone in Washington could be a loan originator without any experience, background check or training. Just a phone and a business card and you were good to go...prior to 2007. It is also inconceivable that our new law does not include ALL mortgage originators (banks, credit unions, consumer finance companies). Brokers are not alone in the fraud dept.

Very good point Rhonda. It is similar to the way brokers have to reveal how much money we make on a loan, while banks, etc. do not. I have no problem telling myclients how much money I am making on the loan, but I know a lot of unscrupulous lenders down here in South Florida that make more than they should, and the borrower never see the "real" cost to them.

JAN

2007

I am for beuibg tough on lenders that encourage illegal practicves. Borrowers that try the same stuff need to get whipped into shape too. Too ioften they initiate the fraud and claim foul when they are caught. It is not always the loan officers fault.

We do need to work to a higher standard though.

JAN

2007

Hi Everyone,

I'm a newbie here to Active Rain but I felt a need to post to this thread... I'm in Ohio....one of the most highly regulated states there is... and on Jan. 1st 2007 the state passed SB185 which evens clamps down harder on Mortgage Brokers... thing is...if your doing business on the up and up already....then you have nothing to worry about... Just a few more disclosures and a bit more liability on the LO and brokerage.

This is the funny part....The Ohio Department of Financial Institutions has a link on their website that takes you to a page called "Public Enforcement Action Lookup" in other words these are companies that since the 1st of the year when the new rules took place...have been investigated for some type of monkey business...

So far there are 65 companies listed.... and I spoke to the State yesterday and the person I spoke to said that there are many more coming up...

It is so hard to believe that just in 30 days that there are that many companies here in Ohio that are doing shady business... but through all of this...I'm glad...because this will weed out all the riff raff and maybe allow our profession to gain the respectability that it deserves.

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