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SAFE Act is Good for Consumers

By
Mortgage and Lending with Mortgage Magic

I am licensed by the California Department of Real Estate (00979517). Effective January 2011 I will also have an endorsement to that license called a Mortgage Loan Originator. This is under the SAFE Act (Secure and Fair Enforcement for Mortgage Licensing Act) which is part of the Housing and Economic Recovery Act of 2008.

The SAFE Act is designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators.

To qualify for the MLO I had to take two exams; a National exam and a State exam. Everyone who will be originating mortgage loans is required to take and pass the exams. There are also education requirements, a criminal background check, and we have to also authorize a credit report to be run by the Nationwide Mortgage Licensing System.

I am so glad that this is coming into place. I cannot tell you how many hundreds of people who came to me during the loan intense times showing me their 1% loan. When I explained to them that it was not a 1% loan and that the 1% was a teaser rate- they never believed me ! They preferred to believe the loan officer who sold them the loan. Now, chances are, that loan officer is out of business. The new law has strict guidelines regarding disclosures and loan packaging. The entire residential mortgage industry is now 'coloring inside the lines'!

With all the changes there are some laws in place that I complained about but they are not all that bad except they are confusing, slow down the loan process and are a little more expensive for the appraisal...But, balancing everything out - the industry is better today and consumers are more protected.

 

Deborah "Dee Dee" Garvin
C2 Financial - San Diego, CA
C2 Financial

Doug, I will give you this, that some of the changes are good for consumers.  But, the fact is, I am not doing anything different than I have for over 20 years....and, I didn't need any licensing standard to teach me ethics.  The biggest benefit to the new laws:  Shoe salespeople and used car salespeople can't "pop" into the business when the timing is right.

Most mortgage "professionals" have been in the business through thick and thin.  We didn't arrive in a BMW to sell the product of the day.  Just my humble opinion....

Oh, and I may be a cynic, but I maintain a good many of the consumers who took that "1%" loan knew exactly what they were getting....but thought the increase in value would win the day.  Amazing how everyone wants to blame someone else for their own decisions.  Not many people didn't have a Mom or Grandmother in our childhood that told us over and over again:  "If it sounds to good to be true, it IS!"

My ultimate message:  Not all mortgage peeps are bad guys...or girls.  Rather tired of the negative connotations over the past few years.  Not meaning to vent on you...I just think we have been under the bus for long enough.

Jul 31, 2010 06:23 AM
Doug Jones
Mortgage Magic - San Jose, CA
Mortgage Broker - NMLS 286668

Deborah...I like your comments. Like you I have been a lender for a long time (1968) and I love what I do and love my clients. I kicked and fought against all of the regualtions but now that the smoke is clearing I can see that this is getting rid of those who should never have been in the business....that includes banks who used to send their reps in and tell us "they could get every deal thru" no matter what !

I am glad that in Calif that we now have to study something about loans. It never made sense to me that I was uder the Calif DRE and that the DRE governed mortgage brokers. So many who entered the business as loan officers under DRE did not know anythng about loans at all...it was crazy. Before opening Mortgage Magic I was a Mortgage Wholesale Manager and worked in banks prior to that--I did see a lot of mortgage brokers who only knew how to get clients. So many did that much better than I do but so many at the same time only worked for a fast buck--I am glad they are gone.

Jul 31, 2010 06:31 AM
Deborah "Dee Dee" Garvin
C2 Financial - San Diego, CA
C2 Financial

Doug, It seems there is a lot of synergy between our respective career histories.  Like you, I spent enough time (can we say "years") in wholesale to know that there were relatively few broker/loan officers who really knew what the "HAY" they were doing.  And, like you, getting a CA DRE license to originate loans was the dumbest regulation I have ever seen.  Twenty years and thousands of loans and I need a real estate license to close a loan??????????  And, the real funny part is the mortgage industry held CA up as the "shining star".  Silly.

I will have to check out your profile to see where our paths may have crossed!  Have a great day!

Jul 31, 2010 06:58 AM