It’s Too Easy to Become a Florida Mortgage Broker
Would-be Florida mortgage brokers 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 Florida home 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.
But 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 Florida 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 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.”
NEW REGULATIONS
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 Florida 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.”
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.
HUMAN NATURE
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 Miami, 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 22nd, 2008 at 9:00 pm
Its about time, but it still wont work. Its the sales ability of the person that gets the job done. You could sell snow to an eskimo at a high price if you are a good salesperson. I have been licensed since 1986, and I have forgotten more than most people will ever know about mortgages and the problem is greed as mentioned in this site. Most / many brokers are nothing more than the undereducated plaid jacket used car salesman stereotype. A test should be given on nothing more than adjustable rates, neg ams and what goes along with them. These tests should be given annually, or even quarterly. Considering the incredible income that is made for literally no more than 5 hours of work from the broker, they /we can have the time to take tests to prove we deserve the money that is earned. Those of us that are with larger companies governed by internal compliance are the only ones that should be able to forgo these tests.