Mortgage Brokers Are at War
The president of the National Association of Mortgage Brokers declared the industry to be “at war” against a number of parties.
George Hanzimanolis, speaking at the annual convention of the California Association of Mortgage Brokers here, said: “We are at war against the legislators who want to legislate us out of business.”
The industry is also at war against the media who put the blame for the current mortgage crisis solely on mortgage brokers, against regulators who want to promulgate new rules, which only affect mortgage brokers and even some consumer who did not tell the mortgage originator the whole truth when they applied for a loan.
It is “a scary time in the market,” he said, as an increasing number of mortgage lenders are forced out of business.
Things will get better he said and there is no need for legislatures to act: “Don’t compound the problem” with new laws, he continued.
Among the issues of concern is the sale of trigger lead lists by the credit repositories. This is an issue NAMB was among the first to speak out against, Mr. Hanzimanolis said.
There is a need for an “opt-in provision,” in which the consumer specifically says the repositories can sell their information. The public blames the mortgage originator, asking why did the originator resell their information to another party. The sale of trigger leads has got to stop.
Mr. Hanzimanolis also gave a brief preview to attendees, saying at the upcoming NAMB West conference in Las Vegas this November the group will unveil an integrity seal of approval. Among the criteria will be ethics and good business practices.
Another speaker who told the audience the market is cyclical and a downturn would have occurred no matter what is happening in the subprime business is California’s commissioner of real estate, Jeff Davi. However, the subprime issue has compounded the situation.
He called on mortgage brokers not to take hasty steps in an effort to improve business, but act appropriately as individuals and as a trade group to be around for the coming upturn in business.
The housing market will solve a lot of its own problems, and for regulators to change rules “willy-nilly” will make things worse, Mr. Davi said.
The Department of Real Estate has registered around 538,000 real estate agents statewide (under California law mortgage brokers and real estate brokers have the same license), meaning one in 53 individuals has a real estate license in the state.
At one point, the agency was getting over 1,000 new applications a week for licenses, but that is dropping. Furthermore, just 88% of brokers have renewed their license and just 75% of salespeople have, both down from past numbers.
In a cooling market, complaints about licensees are likely to increase, he said, and they have. In anticipation, DRE was able to add 38 new positions to the enforcement side.
Because of e-licensing, DRE did not have to add 35 new people in that department, enabling the ability to hire more enforcement personnel.
Still there are only 342 people in the department, Mr. Davi said, and there is no way it can find all of the mortgage fraud going on: “We need your help,” calling on CAMB members to report anyone who acts unscrupulously.