Arizona’s Governor Napolitano signed a proposal requiring that loan originators – mortgage loan officers – be licensed, just like real estate agents, appraisers, escrow agents. . . the list goes on.

I’ve written a couple of posts reporting on the progress of the bill:

• Proposed bill would require Arizona loan officers to be licensed on May 7; and
• Arizona Senate Bill 1028 to License Mortgage Loan Officers on May 26.

According to Catherine Reagor’s Arizona Republic blog, one of the only reports I could find on the bill’s passage (the other was in The Capitol Times), there are 10,000 loan originators in Arizona who will be required to have licenses by the time the law goes into effect in January 2010.  The bill requires loan officers to pass a test, pay a fee, and notify the Arizona Department of Financial Institutions where they’re working.

Many in the state legislature, the Governor, and many from the state’s mortgage and real estate industries supported the bill; they hope it will stem bad lending and slow foreclosures.  According the Reagor, the Department of Financial Institutions received a record number of complaints about bad loans last year.  And while the Department has recourse against mortgage brokers, it doesn’t have any way to punish badly behaving loan officers – until now.