Kentucky Mortgage Lenders Seek to Enhance Consumer Protections

Kentucky mortgage bankers won the tentative backing of Gov. Ernie Fletcher in their ongoing campaign to update the state’s lending laws to better protect consumers, the Lexington Herald-Leader reports.

Asked whether he would support a bill the Kentucky mortgage bankers’ plan to write for the 2008 General Assembly, Fletcher said he would certainly consider it.

“We’ll be glad to take a look at that and work with you,” he told members of the Mortgage Bankers Association of the Bluegrass who were meeting in Lexington.

The issue was raised by Lexington mortgage lender Wayne Thompson, a past president of the association who has lobbied legislators to reform the state’s laws.

Home mortgage fraud is a serious problem in the Kentucky real estate market, Thompson said to Fletcher, but the legislature has not done enough to rid the industry of its “bad actors.”

Thompson and Chris Evans, president of the Mortgage Bankers Association of Kentucky, said the problems include predatory lending, unlicensed loan officers representing lenders, and out-of-state firms doing business in Kentucky without having an office here.

Out-of-state home loan companies sometimes advertise their products and services in Kentucky newspapers, Evans stated, even though they are not licensed to do business in this state.

A task force is being formed to write legislation for the 2008 legislative session, he said. Realtors, commercial bankers, mortgage brokers and others connected with the mortgage industry will be members of the task force or will be asked to review the legislation before it is submitted.

Evans said the goal is to get all industry groups to support the home mortgage loan proposals so the legislature will be more likely to adopt them.

Another goal is to get regulators “to enforce the laws that are currently on the books,” he said. “They are adequate, but they could be better.”

Regulators sometimes ignore complaints, the lenders suspect, because they appear to be trivial or they think that mortgage lenders are simply trying to limit competition.

Competition isn’t the issue, Thompson said.

“This is about protecting consumers.”

SOURCE: Lexington Herald-Leader