New Jersey Home Loan Officers, Brokers to Be Licensed

In a bid to crack down on rising abuse by loan officers in the New Jersey mortgage marketing field, a state senator has unveiled a proposal to make sure the Garden State’s 42,000-plus mortgage solicitors receive mandatory training, criminal background checks and licensing exams.

“Right now, there’s no way to keep unscrupulous loan officers from luring consumers into risky mortgage loans they can’t possibly afford,” said Sen. Barbara Buono, D-Middlesex.

Senator Raymond J. Lesniak, D-Union, said he will be a co-prime sponsor of the measure to be introduced on Thursday.

Solicitors, who normally work for licensed New Jersey mortgage brokers or other licensed mortgage lenders, can get fast access to someone’s personal financial data because they are usually the first contacts for the mortgage applicants.

Current law allows them to go into business simply by paying a $100 fee with no requirements for education, testing or criminal background check.

“We need to patch up this crack in the system by requiring licensing standards, criminal background checks and training to help purge the bad actors from the mortgage business,” Buono said.

“All too often, people about to make the biggest investment of their lives - a home purchase loan - fall prey to scam artists who can steal identity, mislead uneducated investors and then just disappear.”

Under the bill, the Department of Banking and Insurance would be charged with establishing licensing standards for home loan solicitors that would include a minimum of 24 hours of classroom instruction in mortgage and predatory lending laws, underwriting, secondary markets, financing and ethics.

In addition, applicants, including the current list of registered loan officers, would have to successfully pass a criminal background check before qualifying to take the State administered examination for a two-year license.

“It’s a legitimate responsibility of the Garden State to pluck the bad apples from a business that, by nature, gets very close to families and the money they’ve worked for,” Buono said.

Buono stated that mortgage solicitors, also known as loan officers, essentially perform the same functions as New Jersey’s estimated 1,500 mortgage broker licensees by bringing people who need home loans into contact with those who have money to lend.

“The huge difference, however, is that - unlike loan officers - licensed mortgage brokers are personally liable for fraud and can lose their licenses for wrongdoing during the life of a loan,” Buono said.

“This legislation makes it clear that we want accountability for loan officers as a way to guard against consumer fraud.”

SOURCE: PoliticsNJ.com