Mortgage Pros Balk at New Regulations
Mortgage Pros Balk at New Regulations
(many brokers don't apply for new national license)
By Yvonne Ayala McClellan • ymcclellan@news-press.com • December 31, 2010
1:10 A.M. — Today is the last chance mortgage loan professionals will have to apply for a license under the new nationwide licensing system.
Without it they can't work in the industry.
But many are dragging their feet or are not planning to apply for a new license -- and you can blame the economy for that.
About 42,700 mortgage brokers are licensed to work in Florida through 2010, but only about 14,000 applications have been submitted to the Florida Office of Financial Regulation for the new year.
The stricter licensing measure came out of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, after some mortgage professionals hastily approved mortgages that led to the housing crash.
Florida joined the new Nationwide Mortgage Licensing System on Oct. 1 and has been working with professionals to process applications quickly.
The Florida Office of Financial Regulation is examining each applicant's credit and background, including tax liens.
Greg Oaks, bureau chief of licensing for the Florida Office of Financial Regulation, said applicants only need to submit the preliminary application and pay the application fee by today in order to continue working in 2011.
The office extended the time applicants have to complete fingerprinting, education and other requirements until March 31 to give them a little more time to complete the process.
Some industry professionals feel the stricter measures go too far and can be an added financial burden in a tough economy.
Tim Hart, branch manager for VanDyk Mortgage in Fort Myers, said "people are not wanting to spend the money to stay in the business and recertify."
Hart said the state already had an effective system in place to check professionals applying for licenses in the industry.
Oaks said Florida has been doing both state and federal criminal background checks since 2008 that are the same or more stringent than what is required by the SAFE Act.
"It's more regulation that's not needed," Hart said.
Hart and other mortgage loan originators in his office have taken and passed the national exam and submitted their applications, but he said he still needs to take the state exam.
While it's an added step that can be time-consuming, the added costs can also be burdensome, especially to smaller, community-based mortgage loan originators who are struggling to make ends meet, he said.
Rick Larson, with Larson Education Services in Fort Myers, said basic state licensing costs including education, background checks and fingerprinting were at about $250, but have now gone up to about $600.
He said some of those added costs are due to added testing at the national level on top of the standard testing for the state, fingerprinting with the department of law enforcement as well as the Federal Bureau of Investigation and other added regulatory checks.
While these added steps are pesky to some who are accustomed to simply renewing their license, passing the new national exam has been a challenge.
Larson, who offers testing prep across Southwest Florida, said the passing rate is at about 68 percent, which means that 32 percent of test-takers are failing exams and need to take the exam again.
Robbie Roepstorff, president of Edison National Bank, said the new licensing system is a good measure for lenders who specialize in mortgage loans, but adds up to more expenses and more regulation for community banks that offer a variety of loan products.
"We're already trained as general lenders and we're already regulated."
(many brokers don't apply for new national license)
By Yvonne Ayala McClellan • ymcclellan@news-press.com • December 31, 2010
1:10 A.M. — Today is the last chance mortgage loan professionals will have to apply for a license under the new nationwide licensing system.
Without it they can't work in the industry.
But many are dragging their feet or are not planning to apply for a new license -- and you can blame the economy for that.
About 42,700 mortgage brokers are licensed to work in Florida through 2010, but only about 14,000 applications have been submitted to the Florida Office of Financial Regulation for the new year.
The stricter licensing measure came out of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, after some mortgage professionals hastily approved mortgages that led to the housing crash.
Florida joined the new Nationwide Mortgage Licensing System on Oct. 1 and has been working with professionals to process applications quickly.
The Florida Office of Financial Regulation is examining each applicant's credit and background, including tax liens.
Greg Oaks, bureau chief of licensing for the Florida Office of Financial Regulation, said applicants only need to submit the preliminary application and pay the application fee by today in order to continue working in 2011.
The office extended the time applicants have to complete fingerprinting, education and other requirements until March 31 to give them a little more time to complete the process.
Some industry professionals feel the stricter measures go too far and can be an added financial burden in a tough economy.
Tim Hart, branch manager for VanDyk Mortgage in Fort Myers, said "people are not wanting to spend the money to stay in the business and recertify."
Hart said the state already had an effective system in place to check professionals applying for licenses in the industry.
Oaks said Florida has been doing both state and federal criminal background checks since 2008 that are the same or more stringent than what is required by the SAFE Act.
"It's more regulation that's not needed," Hart said.
Hart and other mortgage loan originators in his office have taken and passed the national exam and submitted their applications, but he said he still needs to take the state exam.
While it's an added step that can be time-consuming, the added costs can also be burdensome, especially to smaller, community-based mortgage loan originators who are struggling to make ends meet, he said.
Rick Larson, with Larson Education Services in Fort Myers, said basic state licensing costs including education, background checks and fingerprinting were at about $250, but have now gone up to about $600.
He said some of those added costs are due to added testing at the national level on top of the standard testing for the state, fingerprinting with the department of law enforcement as well as the Federal Bureau of Investigation and other added regulatory checks.
While these added steps are pesky to some who are accustomed to simply renewing their license, passing the new national exam has been a challenge.
Larson, who offers testing prep across Southwest Florida, said the passing rate is at about 68 percent, which means that 32 percent of test-takers are failing exams and need to take the exam again.
Robbie Roepstorff, president of Edison National Bank, said the new licensing system is a good measure for lenders who specialize in mortgage loans, but adds up to more expenses and more regulation for community banks that offer a variety of loan products.
"We're already trained as general lenders and we're already regulated."
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