Now that the cows are out of the barn, they are tightening up on mortgage brokers and making sure there are no criminals working as mortgage brokers. You would think after the Savings and Loan melt down of the 80's they would have thought to do this then instead of now. Don't they run the fingerprints of these people. When you get a real estate license you get your fingerprints run through the FBI's computer. Why on earth did they not do that with the people in charge of lending people money.
The following is from a recent article in NEWS and EVENTS, Florida Realtors.org.
The Office of Financial Regulation has allowed more than 10,000 people with criminal histories -- including armed robbers and cocaine traffickers - to work in the mortgage industry since 2000. The newspaper found that convictied felons went on to fleece consumers and lenders of at least $85 million.
The proposal represents a reversal for the longtime state regulator who has definded his agency's licensing practices since publication of the Herald's investigation. Saxon insisted that "we do not have a systemic problem of licensing felons".
He acknowledged the standards for mortgage professionals "have not kept pace with the increasing sophistication of the mortgage industry."
His proposal asserts that Florida's mortgage crisis constitutes "an immediate danger" to the public and requires emergency measures to protect consumers from fraud and predatory lending.
The measures present a host of restrictions on former criminals trying to enter the once-free whelling industry, including:
Banning anyone convicted of a felony involving fraud, money laundering, dishonesty and breach of trust from becoming a broker. Despite a requirement to screen criminal backgrounds, Saxon's agency allowed people into the industry who were guilty of 2,821 financial crimes, including 922 larcenies, 752 frauds and 161 forgeries.
Requiring former crimnals such as murderers and rapists to wait 15 years from their conviction date before getting a mortgage brokers license. (CAN YOU BELIEVE THIS. 15 years after raping or murdering someone you could get a mortgage brokers license. What is wrong with this picture.)
Barring people guilty of misdemeanors involving fraud, dishonest dealing and moral turpitude from getting a license until five years after their conviction. (So you only had to wait five years if you had been involved with fraud, dishonest dealings or moral turpitude. HELLO, fraud, someone is guilty of fraud and you are going to give them a license to be a MORTGAGE BROKER.)
The proposal also requires that regulators suspend or revoke a license if they discover someone lied on their application. The investigation found numerous cases of brokers who got their licenses even after regulators caught them lying, including one man who omitted his conviction and 17 year prison sentence for strangling his wife and dumping her body into Tampa Bay.
License Renewal
The new rules do not include criminal background checks when mortgage brokers renew their licenses, a key to weeding out professionals who break the law after entering the industry. The Herald found scores of brokers who were convicted of financial crimes - including mortgage fraud - and continued peddling laons without the threat of state sanctions.
The measure also do not address the licensing of loan originators -- those who do the same job as mortgage brokers with the same access to consumers' personal financial information. The Herald found more than 5,000 people with criminal histories working in Florida as loan originators, many of whom went on to scam consumers and lenders out of millions.
State leaders involved in mortgage industry legislation they favored the new proposals, and questioned why the agency took so long to press for changes.
Lawmakers have complained that Saxon showed a lack of urgency in pushing for reforms and did not alert them about the need for tougher regulatory oversight.
"There is a huge question mark as to why none of this was brought up before when it really mattered, said House Minorityleader Dan Gelber, D Miami Beach. (I guess, like I said why wasn't it put into place after the Savings and Loan Meltdown in the 80's)
Sen. Bill Posey, R - Rockledge, who chairs the committee that oversees the OFR, said he wished Saxon had proposed the changes earlier. "We never suspected that someone could have been guilty of a felony for fraud and still have a license," he said.
Don Saxon's resignation to be effective 9/30
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