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Licensing the Lender - What a Novel Idea!!

Licensing the Lender - What a Novel Idea!!
by Kaushik Sirkar, Chandler REALTOR®
Chandler AZ Real Estate

To practice real estate, an agent or Realtor must have a license. Obviously just having a license isn't enough to 'make a good agent'. It is only the absolute bare minimum. Various blogs and discussions have focused on increasing the requirements for receiving a Real Estate license. Make it more rigorous - make the educational requirements more stringent. I have even blogged about this topic before. However 'easy' it may be to get a Real Estate license - the license is still required to practice Real Estate! (and you can't have a criminal history)

What about the other big part of potentially the biggest financial transaction of one's life. How about the loan? Sure, there are tons of mortgage professionals out there. Some are excellent, very ethical, know a whole bunch and are willing to share their knowledge. Like who? Try George Souto, Brian Brady or Jeff Belonger. There are many others - I'm sorry I can't name you all. But please browse AR and you'll find others as well.

Unfortunately, not all folks involved in lending are like some of our colleagues on AR. Some are unethical, will not divulge all the relevant information and are really just out to make a fast buck at the expense of their supposed 'clients'. I have blogged about a couple of these before where mortgage fraud is just running rampant. Will there always be some crooks out there? Sure. But can we do something to reduce the number of said crooks? Absolutely. An article in today's Arizona Republic address examples of these 'crooks' and puts forth a discussion on AZ House Bill 2320. This bill would purportedly require the vast majority of Arizona's loan officers and originators to BECOME LICENSED!!!

I say - BRAVO! I am in favor of anything and everything we can do to increase the ethics, knowledge and accountability of 'Professionals' involved with Real Estate and this certain includes lenders! Apparently, over 30 states have licensing requirements for lenders. I think its about time Arizona joined this exclusive club. Supposedly the lousy mortgage brokers from other states, as well as folks with criminal histories have come to Arizona to practice their trade. And practice they have by preying on the uninformed - taking them for tens of thousands of dollars only to never be heard from again.

Will licensing requirements eliminate all of the bad seeds? Unlikely. Will licensing requirements reduce the # of these CROOKS? I certainly hope so!

Thanks for Reading :)

Kaushik Sirkar, Chandler Realtor
http://www.homesphx.com

Posted by Kaushik Sirkar on 02/12/2007 08:59 PM

Comments (10)

arizona real estate, chandler real estate, lender licensing, mortgage fraud

This post has been included in Arizona Information Maricopa County, AZ Information

10 Comments on Licensing the Lender - What a Novel Idea!!

FEB

2007

Kaushik, whether or not licensing would reduce some of the fraud and unethical Loan Officer it would still be an idea that I would welcome in Connecticut. We do not have to be licensed, and there isn't any continuing educational requirements either. We do training on a continuously at the company I work for, but that is not the norm.

Crooks will always be there, and always seem to find away around the rules. I am thankful that they are in the minority in this business, however, they do cause the majority of the problems.

I am not one for more government rules and regulations, but like I said before I do welcome the concept of Loan Officers having to be licensed.

KAUSHIK -

Good topic that most will agree with but...

This will only impact loan originators that work for certain employers...many will be exempt.
It's not a level playing field when it comes to the licensing requirements for originators.
Employees of Federally chartered banks are EXEMPT...brokers and correspondents are not.

Personally, I do welcome individual licensing for ALL originators to help improve competency.
In addition, meaningful ongoing continuing education requirements would help as well.

George + Brian - Looks like both of you are in favor of having licensing across the board. George - I don't think licensing could hurt with reduction of 'crooks'...Brian - what can be done to have all originators be licensed??

FEB

2007

Kaushik

This is a great article!

Congratulations, it was included in the most recent Unsung and Overlooked collection.

This should get it a little more exposure :)

Aloha Kaushik - Great post, I have written similar ones in the past ad agree with you completely. I am in Hawaii and feel the lending side is the Wild West. We have licensing, but do have similar requirements as we do for Realtors. I think along with licenses we should have education requirements and make the licenses have teeth for unfair business practices.

The professional loan officers I deal with agree completely on this issue. It would help flush out some of the folks who should not be there.

Kaushik, great post. I was completely unaware that there are states where mortgage brokers are unlicensed. Of course you're going to get all the seedy ones that were stopped elsewhere go ply their wares over there. I hope this gets remedied.

FEB

2007

Mark - Thanks for the compliment and including me in your post!

Randy - Great minds think alike! ;) Its ridiculous in Arizona just how many lenders are out seeking business. I agree that the true professionals, the good guys/gals in the industry, would have no problem with licensing!

Maggie - Exactly....as AZ is one that doesn't require licensing, we have lots of the seedy folks...

FEB

2007

State originator licensing is a scam to raise money. The banks won't play ball so it unfairly punishes brokers. The only way to effectively license originators is to enact it federally requiring banks to play ball, also.

The banks are behind this state legislation, K because it eliminates competition. Follow the money!

Make no mistake about it, though, Kaushik. I am absolutely in favor of originator licensing for selfish reasons.

Brian - Me thinks we are in agreement. Make the banks play by the same rules - definitely! I am in favor of licensing ALL the members of the lending community - mainly to eliminate a few of the shady people in the business. And I have no problem with yours selfish reasons....at some level, we are all in this to make money (whether folks admit it or not). Its just about making the money ethically while striving to assist others at the same time!

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