National Residential Originator Licensing
Many of you may remember that we took a stand last year against the New York State Banking Department and their attempt to require individual licensing for residential loan originators. For those of you who were sleeping, judging by the level of support and input we received, many of you were, the law passed and was signed by then Governor Paraki prior to him leaving office. (Thanks George)
It is not over. There is now a push for a National Residential Originators loan license. It has been ascribed to by 29 states, not including New York…yet. The push by the New York State Banking department to enact this legislation was to help fill a 30 million dollar hole in their budget. New York has pushed many top lenders out of the state who are now federally regulated. This means that the fees generated by regulating these banks (Chase and HSBC) have to come out of fewer and smaller pockets. Ours.
This is why we chose to fight the legislation. The legislation passed at the end of the legislative session last year and will be enacted in 2008. It will require registration with a fee, estimated to be $500 by some reports (not verified). It will also require continuing education which will be monitored by the banking department. This will ensure additional revenue for this agency.
While we are not opposed to the idea of licensing and given the many transgressions that are impacting our industry right now, licensing may not be a bad way to get rid of some of the bad apples. The problem is the way in which it has been handled. It appears that instead of taking measures to ensure financial prudence within their budget they have chosen to go on the attack. Well, they won.
I have gone on too far. Here is the message,. It is important that we all become involved in watching the legislative process. We are rapidly being regulated out of our own business. The added requirement of loan officer licensing in addition to company licnesing and continuing education will add a layer of cost that will put smaller companies out of business. The laws are designed to benefit the consumer and increase the professionalism of the industry. Ultimately the cost of the implementation will be passed on to the loan company and the loan officer. Ultimately this pressure may put many lenders out of business, thus limiting choices for the consumer. Improprly implemented they will be bad for the consumer and bad for business.
For more information go to the Mortgage Fraud Blog.
