I just received an email from the Michigan Mortgage Brokers Association. ( a great group trying certify and make mortgage originators more professional and more knowledgeable.)
Congress Passes Critical Home Mortgage Aid Legislation
Senate passes H.R. 3221 in Special Saturday Session
After months of negotiations and an initial veto threat by the White House, H.R. 3221, the "Housing and Economic Recovery Act of 2008," is expected to clear the President's desk before the end of July. The final bill combines a number of measures that will assist at-risk homeowners and stabilize the mortgage market. Key measures include:
- Modernization of the Government Sponsored Enterprises, Fannie Mae and Freddie Mac, (GSEs) and the Federal Housing Administration (FHA);
- A nationwide loan originator licensing and registration system;
- Increases in the FHA loan limits to the lesser of 115 percent of the local area median home price or $625,500 (up from $362,790);
- Increases the cap on mortgage loans Fannie Mae and Freddie Mac can purchase ("conforming loan limit") to the lesser of $625,000 or 115 percent of an area's median home price
The idea of a nationwide loan originator licensing and registration system is great. All individuals including bank employees should be required to be licensed. This will be a plus for consumers. This will help to combat identity theft coming from the mortgage industry.
A mortgage originator is privy to too much private information that can be used in identity theft. I worked at a company where an individual was arrested for identity theft (after he left the company) But it made me nervous for a while that some of my clients might have been compromised. Luckily they weren't.
By doing criminal checks and having continuing education requirements will help the industry. However do not believe that it is a cure all. The insurance industry has licensing requirements but yet there are many insurance agents that sell questionable products.
But I applaud this step toward standardizing requirements and making the mortgage industry a little better.
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