License, registration please
New housing law means work for brokers, lenders
New housing law means work for brokers, lenders

By Richard Mize

Published: August 2, 2008

The big new federal housing law imposes licensing on all mortgage loan originators and beefs up education requirements for mortgage brokers.

Officials with the Oklahoma Department of Consumer Credit, which licenses brokers and supervises lenders dealing in mortgages, and the Oklahoma State Department of Banking, which will help determine licensing for bank loan originators, started working on how to respond to the law this week.

President Bush signed the Housing and Economic Recovery Act Wednesday, setting off a flurry of huzzahs from most real estate and mortgage industry trade groups. The law has "something for everyone,” according to the Mortgage Bankers Association of America.

It aims to strengthen oversight and restore credibility to sectors of the business that have taken a beating in the declining national housing market, which appears to have largely skipped Oklahoma so far, except for some increase in foreclosures and a slowdown in home sales. Home values here remain firm, appreciating slightly.

"The state of Oklahoma is way ahead of the federal government” when it comes to licensing mortgage brokers, said Cass Fahler, senior partner in Tulsa's Principle Mortgage Group and a former president of the Oklahoma Association of Mortgage Professionals. "We know brokers are out there getting (bashed), but Oklahoma has been putting their best foot forward for quite awhile.”

Mortgage brokers have been licensed and regulated by the Oklahoma Department of Consumer Credit since 1997, he said. Licensing and regulation were extended to broker loan originators three years ago, he said.

State law requires background checks and 16 hours of continuing education annually, among other things, for mortgage brokers and loan originators. The federal law, among many other things, adds a 20-hour education requirement before licensing.

The federal law is meant to create uniformity in licensing across the country.

"That's been our beef: Some states have it and some don't. If we blacklist somebody here, they can go to another state,” Fahler said.

For bank loan originators, the federal law requires licensing, background checks and other regulations new to the industry, as well as a national registry of all mortgage loan originators.

"Borrowers and lending institutions will be able to access information about all loan originators, including their background and history as a loan originator,” the Senate Committee on Banking, Housing and Urban Affairs emphasized in a summary of the nearly 700-page law.

The Oklahoma Consumer Credit department already is working with federal regulators on how to implement the new requirements for mortgage brokers, Administrator Roy B. Cooper said.

The Oklahoma Banking department will work with the Federal Financial Institutions Examination Council and the Conference of State Banking Supervisors to license loan originators working for banks, said Charles Griffith, deputy banking commissioner.

The national registry is "perhaps most important” of all the reforms in the law, according to the National Association of Mortgage Brokers. It will "help to ensure all mortgage originators are well educated and knowledgeable about the loan products they offer and provide effective protection for consumers against bad actors in this industry.”

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