dcsimg

Preventing Foreclosure: Should Mortgage Originators Be Regulated?

By Sheryl Landrum
Mortgage Credit Problems Columnist


Featured Home Equity Loan Provider
    • Get your Free Quote in Minutes!
    • Lenders Compete for your Business
    • Lock in a Low Fixed Rate Before Rates Increase!
    • Do you have the Lowest Rate Possible? Find Out Instantly!
As we have discussed in previous columns, many lenders have initiated stricter mortgage guidelines in an effort to prevent home foreclosures. However, the loans that may increase the risk of foreclosures can be lucrative for loan brokers and loan officers to sell. Now the government would like to regulate the brokers and the lenders who sell mortgages and penalize those who are found guilty of predatory tactics and other wrongdoings that can lead to a higher rate of home foreclosures. Is this a good idea?

You bet it is! Regulating the mortgage industry, or any other financial institution or industry should always be a priority and it can help avoid more mortgage foreclosures. The National Association of Mortgage Brokers (NAMB) "is backing the creation of a federal registry, one run by the Federal Trade Commission, the Federal Reserve or some other agency that would flag the con artists wherever they are so that they can never work in the mortgage business again." Currently a mortgage broker who is found guilty of wrongdoing can easily go to work under the license of a mortgage banker and resume the activities that may harm consumers and lead to higher foreclosure rates. Mortgage banks are also not required to hire loan officers that are state licensed whereas mortgage brokers are.

If the registry passes all loan officers will be required to be state licensed and regulated. Not only will it help prevent loan originators to sell loans with high foreclosure risk but it will help maintain professionalism within an industry that has had its reputation damaged by recent home foreclosures. Until that time, you can help to avoid foreclosure risk by ensuring that the loan officer you work with is a licensed one.

Source
The San Diego Union-Tribune, Sunday, July 1, 2007, Brokers Chafe over Regulatory Proposal, by Lew Sichelman

Solve any
debt problem here.

Start here: