Florida Mortgage Broker Courses: Too Easy
Would-be mortgage brokers in Florida need little more than a weekend course to qualify for a license.
And loan officers, who originate loans for mortgage lenders and banks, need no license at all.
The job of a mortgage broker or loan officer is to match borrowers with lenders and guide them through what is often one of the most expensive investments of their lives. As people rushed to buy homes during the housing boom of 2001 to 2006, the number of licensed brokers ballooned from 28,140 to 67,266.
However, licensing requirements did not keep pace. In Florida, brokers need only complete 24 hours of classroom education, pass a state exam by at least 70 percent and pay $200 for a license. Loan officers need only work for a mortgage lender or bank.
The Florida Association of Mortgage Brokers has repeatedly urged the state to step up licensing requirements, so that it’s harder for rogue players to enter the industry, says board member Steven Schneider.
”Really, it’s too cheap and too easy to become a [Florida mortgage] broker,” Schneider says. “I have recommended to the state to raise the cost from a few hundred bucks to $1,000 or more. If it’s not so easy to become one, chances are they won’t.”
A new law that takes effect in October will require brokers to have at least a high school education and to give more detailed disclosures about adjustable-rate mortgages. The law was passed in response to consumer complaints about misinformation from mortgage brokers.
Mortgage brokers earn commissions, usually in the thousands, for closing loans. Riskier loans bring higher commissions, and some consumers now say their brokers sold them on risky loans to get more money.
”The market has a built-in moral hazard,” said Uriah King, a policy analyst with the Center for Responsible Lending.
”That mortgage broker doesn’t own the loan, they don’t take on the risk, so their incentive is to close the loan and move on to the next deal,” King added.
Alex Sanchez, who heads the Florida Bankers Association, doesn’t believe additional licensing requirements are the answer. He says banks are already highly regulated by federal agencies.
Jim Greer, president of Gold Coast real estate schools, is not sure stricter licensing requirements would work. He says current requirements are sufficient, and students who learn the laws still may not follow them.
”What you see is greed getting in the way, and doing what they do to make the money,” Greer says. “I don’t know if it’s a 24-hour course or a 60-hours course is going to make an impact.”
However, George Fernandez, president of First Realty Capital, a Florida mortgage lender, says licensing for all loan officers who deal with homebuyers is long overdue. He says he chooses not to hire unlicensed loan officers.
”A [residential mortgage] is such a complex product,” Fernandez says. “You can be a doctor and still not know what you’re getting when you get a mortgage.’
SOURCE: The Miami Herald
July 25th, 2007 at 9:40 pm
One thing not being discussed which I feel is a larger
issues is that the mortgage companies award mortgage
brokers with huge commisions for deals which are BAD
to the consumer. The brokers push adjustable rate and
subprime deals on to the consumer disguising them in
difficult to understand language on the mortgage
paperwork and people with GOOD credit get horrible
subprime deals that force them into default. This is a
very large problem and I have written to my elected
representatives but the mortgage industry has so many
of them in their pocket I doubt anything will happen.
The defaulters will just be demonized as “deadbeats”
not worthy of sympathy. There are Federal laws that
protect the rights of deadbeats and yet those that pay
their bills and maintain a credit rating deserving of
preferential interest rates have no such protection.
It is funny hearing Countrywide whine about the problem when they are the ones that created it.