Number of Colorado Mortgage Brokers to be Slashed
July 26, 2009 by Bob Schenkenberger · 9 Comments
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Colorful Colorado will not be so welcoming to mortgage brokers in just over a month.
On August 31st the state of Colorado could lose up to to half of it’s mortgage brokers. Apparently over 4000 of the 8700 licensed mortgage brokers have failed to pass a required exam. The penalty is loss of license, and it all goes down the end of August.
One of the last states to regulate the activities of mortgage brokers, Colorado’s law went into effect on Jan. 1, 2008. In a brilliant decision, all of the state’s brokers were automatically licensed. To keep in good graces and retain their license, a mortgage broker had to complete 40 hours of education, and pass a written test within a year. Well, 18 months later it is clear that was an error.
Erin Toll, the director of the Colorado Division of Real Estate (the entity regulating real estate and mortgage brokers,) was quoted by the Denver Business Journal as saying “We could be looking at a complete disaster.”
My opinion is this will not create a disaster, but a level of professionalism in the mortgage business that the public can actually trust!
Well done, and good riddance!
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Bob has been an active REALTOR for 18 years. During this time, he has closed over 500 transactions, and has been the broker of record for 1000's more. Bob can be reached via email (bob@gethomedenver.com) or phone (303.770.1180.)
I think it will clean things up a bit also keep the brokers that know what they are doing around
Mike, I’m with you on that!
.-= Bob Schenkenberger´s last blog ..Number of Colorado Mortgage Brokers to be Slashed =-.
I completely disagree. I see nothing good coming of this news!
As a Real Estate Licensee for over 35 years I do not believe it was the licensing that put me or anyone I know on a higher professional level. It was the Industry itself that has sought and succeeded in an increase in the degree of Professionalism.
Combine your numbers “lost mtg brokers” with S.A.F.E. (Fed Licensing) where we will likely lose another 1/3 of independent Mortgage Brokers and you soon have little independent competition to big banking as a source for your client’s loans.
I don’t know about you but in all my years it has rarely been a bank that offered the competitive financing. With less competition rates and fees have nowhere to go but up. This does not serve the Public Interest in my view.
Sure, licensing is a good idea so we have some assurance everyone has a uniform knowledge of rules/regs. In Colorado this has mainly been used to generate fees since the new Fed Licensing will cut the brand new 3 year Licenses to one year after just having paid the full three year fare and still there is no offering of continuing education to be found on a state level like Real Estate. How has this increased anyone’s “professionalism”? Just 5,000 more unemployed people.
Under Colorado laws as a Mortgage Broker, there are 3 new very ridiculous forms plus a raft of over 15 Federal forms including an immediate Good Faith Estimate and Truth In Lending form. When I applied to 1stBank for a Real Estate Loan (portfolio) last Dec, there were three forms: the 1003 application, ECOA (equal credit opportunity), and a servicing disclosure. Not exactly a level playing field, Bob.
I feel it is necessary to maintain our balance about what creates a healthy financial environment for a competitive market and not fall prey to the political “hustle” such as I have observed here in CO in and since the last election.
Lets face it, our career Federal Regulators were “asleep at the switch” on the derivative explosion and have blamed everyone else for the results, and the Federal Gov is making more bad decisions today than an out of control teenager. That is no excuse to throw away everything we know or hold dear. We just need to prepare a little better for the next election in knowing what our candidates positions are and why.
Thanks!
Brent, I appreciate your passion. The bar the state sets for licensing of mortgage brokers is not very high. Those who will not take the class, or are unable to pass the test, should absolutely NOT be able to be licensed! There are 1000′s of mortgage brokers who were able to get licensed, and it’s not fair to them to allow the others to skate. Part of professionalism is the ability to do what it takes to get and/or keep your license.
You make a very valid point on the inherent fairness of a different set of standards for mortgage brokers and mortgage banks. I agree with you on this point and will try to address it in another post!
.-= Bob Schenkenberger´s last blog ..Denver Metro Market Update July 2009 =-.
Brent I absolutely and totally agree with you 5000% I have been in the mortgage industry for 27 years with not a blemish and NEVER did any sub prime or the other nonsense and now because I chose to stay out of what Wall Street created I have been penalized. Those that are not familiar should really look at what is happening. More big government and regulations are not what is needed. In all the years I did loans I/we never had a complaint and a pretty pristene record. those that were doing unlawful things with no ethics will ALWAYS do that. Licensing will not clean that up. Track record and experience should be looked at. As far as Mortgage Brokers go we were one of the first in the business and should have been “grandfathered in”…………..and one of the states that currently licenses Mortgage brokers does that. I will get all of the items necessary because they require it but I sure do not agree with it.
Steve, thanks for the input! We are all in agreement, that responsible mortgage brokers don’t need to be licensed.
You add to my point that those who are responsible, professionals will do what it takes to get licensed. As you put it, “I will get all of the items necessary because they require it…” My point is those, who fail to do what is asked, are most likely the “bad apples” that we can do without.
Thanks again for joining in!
.-= Bob Schenkenberger´s last blog ..$8000 Homebuyer Tax Credit Countdown is on! =-.