Always use a broker you know and trust. According to Renee McGaw of the Denver Business Journal, as of today, the Colorado Division of Real Estate has deactivated "4,560 mortgage broker licenses." Back in 2008, the state instituted licensing of mortgage brokers and all of the state's brokers were given licenses with the understanding that within 1 year, they would complete the state's mandatory licensing tasks of continuing education, a licensing test and a criminal background check. Many brokers rose to the challenge and fulfilled the requirements by the January 1, 2009 deadline. According to McGaw, the state extended the deadline and gave numerous warnings of the looming new deadline, but as of August 31st, those who had not completed the requirements had their licenses deactivated.
Erin Toll, Director of CODORA said in the article (Denver Business Journal, 2009), "We are left with less than half the number we had Friday." That number is down to 4,252, licensed brokers.
Why so many dropped? It could be simply a matter of attrition - with the changing lending regulations, credit freezes and harsh economic times, many brokers could have left the game and therefore not completed the licensing requirements. Hopefully, those out there still in operation are licensed, but that may not be the case.
What does this mean for consumers? Theory would suggest that those brokers operating in CO are licensed and have fulfilled the state requirements. Reality might suggest otherwise. Consumers should double-check with their mortgage broker to make sure he or she is actually licensed. One way to veritfy is to visit the state's online database to search for licensed mortgage brokers, real estate brokers and appraisers: Search Here
Real estate agents - it may be time to check the database yourself to see if your mortgage broker made the cut - always work with a licensed, trusted broker.