LICENSING FOR LOAN OFFICERS BY 2010

Well, it’s a start!!  Finally, effective January 1, 2010, loan originators must pass a test, background check and work for a licensed Banker or Broker.  I hope this will lay the groundwork for more stringent testing and higher standards for what our starting point is. 

Good things about the bill are:  mandatory background check to see if the loan officer has any criminal records, fraudulent history or judgements pending.  It also puts the burden of fraud / mis-doings onto the L.O., not just it’s employer.  It should also eliminate many of the out of state lenders that do business here illegally.

The shortcomings of the bill are:  The bill EXEMPTS institutions at the FEDERAL level.  This is a joke.  It means the loan officers at Wells Fargo, Bank of America, Wachovia etc. do not have to be licensed.  All in all, these direct employees already meet higher screening standards that brokers don’t necessarily have to meet.  I have no issue with these peers.  In fact, most legitimate Federal Bank employees will take the tests and get certified just to have the accreditation.  My objection is that is still gives a green light to the “bulk”banks of the world, all who employ illiterate call-center loan officers, the ones that slam many consumers into products or loans that are unsuitable.  These “call center banks” are all owned by Federal Banks.  

In an ideal world, I’d love to see loan officers bonded, along with having a credit report history that proves the individual is not in financial difficulty.  Too often we see loan officers (along with similar realtors) making a transaction just for the sake of commission, only because they are in such dire need for the commission—at the expense of their client.

THESE DAYS’ WILD MARKET RIDE

The Dow Jones has dropped almost 900 points over the past few weeks.  Our 30 year fixed rates, creeping into the high 6%s just a few weeks ago after the FED basically announced the rate cuts are over, have come back down to the low 6%s.  This is due to investors moving their money from an unstable stock market into our bond and mortgage back security market, which is where we get our mortgage money.  Lots of factors, but one of those factors is the major bank earnings—er, uh, I mean losses.  Until the banks, known as ‘the financials’ in Wall Street talk, stop losing money—the stock market will suffer, house loans will be in short supply, and this will keep our housing market either suppressed, or in further decline.  Ouchie !!!!