California Mortgage Association Opposes Proposed Licensing Reform

The California Mortgage Bankers Association objected to another group’s proposal that loan officers working for banks and mortgage companies meet the same license requirements as independent mortgage brokers, according to the Orange County Register.

Independent California mortgage brokers must currently take college courses, pass a test and undergo a criminal background check to get a license from the state Department of Real Estate. But employees of lenders can work under the auspices of their company’s license from the state Department of Corporations.

Last week, the California Association of Mortgage Brokers issued a new package of consumer-protection measures, including a proposal calling for uniform licensing for every loan officer.

Dustin Hobbs, spokesman for the California Mortgage Bankers Association, said his group objects to the licensing measure, saying that Department of Corporation licenses have better consumer protections.

Employees must receive training before they can set up a home mortgage loan for the state’s homeowners, he said, and their employers undergo regular audits and must meet minimum capital requirements.

“The assertion that there’s no standards on our side, it couldn’t be further from the truth,” Hobbs said.

Hobbs maintained that the state mortgage brokers’ proposal is a throwback to operations before 1995, when the dual paths to licensing were created. A subsequent state government study found that consumer protections in that law are sufficient.

But a spokesman for the state mortgage brokers association stood by his group’s position.

Michael Faust, the association vice president, argued that there’s no assurance now that employees working under their company’s license are adequately trained and don’t have a criminal record.

“What we’re talking about is taking a uniform approach. It’s a disservice to the consumers of California not to be assured that the person they’re sitting across the table from (meets) the same set of standards,” Faust said.