The Arizona state legislature today is pondering a move to close a legal loophole that has allowed thousands of non-licensed brokers in the state to solicit loans and earn commissions. House Bill 2320, slated for its fourth round in front of legislators this week, would require licensing of an estimated 18,000 unlicensed brokers currently operating in the state, clamping down on what many say has become an unruly industry in the state. More than 30 states already require mortgage officers to be licensed. The Arizona Department of Financial Institutions, which oversees state banks, credit unions, escrow firms and mortgage brokers and lenders in the state, is backing the bill and would be responsible for regulating mortgage officers.
The bill also has the support of numerous industry groups, including the Arizona Association of Mortgage Brokers. "There are loan officers in Arizona who aren't educated on the business. They make mistakes and put consumers in the wrong loans. And some are committing fraud," said Stan Lund, president-elect of the Arizona Association of Mortgage Brokers, in an interview with the Arizona Republic regarding the Bill. The current version of the Bill exempts brokers working for a large lender from the new proposed regulations. The exemptions come on the heels of past protests from lenders such as Wells Fargo and Countrywide, who have said they train their own brokers and impose strict compliance rules of their own. Concern over the cost of certifying their own workforce had managed to stall the Bill on three separate occassions in previous legislative sessions.
Don't subscribe? Be sure to sign up today to get our free email updates delivered direct to your inbox!