Even with some pretty nasty stories about mortgage brokers and bank mortgage loan officers in recent years to point out industry problems, the Arizona Mortgage Brokers Association had to impose legislation to license individual loan officers in Arizona. (Only companies are licensed now.) Despite all the accusations that have been going on during the current loan problems, the AAMB was required to make a political career around an Arizona Senate Banking Committee chairman who felt the law was too much of a regulation. and setting a bar too high to enter.
In previous years, we have had strong opposition from the Arizona Mortgage Lenders Association. (formerly “Mortgage Bankers Association”). They felt that they should not be forced to license their loan officers because they were “too well trained, etc.” As late as last year, I felt they had secretly opposed the legislation even after our new Superintendent of Financial Institutions called them on the carpet for not supporting the AAMB effort. This year, there were very few bankers left to argue about it. Institutions insured by the FDIC and institutions authorized by the federal government will remain exempt. Arizona does not authorize or supervise them.
DFI Superintendent Felecia Rotellini is a brilliant attorney with experience prosecuting financial crimes in the Attorney General’s office. Honest lenders respect and support it, and criminals have learned to fear it, as it should be. There is a new “Sheriff” in town and we like her willingness to work with those of us who see this industry as more than just a job.
Having helped found the AAMB 28 years ago, we believe this legislation has proven to be your best effort. It took ten years to pass a law that is urgently needed. As employers, we have suffered for years with companies that are unwilling to tell us that they fired a loan officer for cheating, stealing or fraud. So the “bad apples” were never taken out of business. They just went from one company to another. Now the prospective employee will either have a license that requires education and a background check or they will not be allowed to work. Individual loan originators will begin to bear some individual responsibility for their actions, even when their employer remains ultimately liable for their actions. Arizona home buyers and homeowners should have a much higher level of confidence when dealing with mortgage loan originators in the future.
It was the mortgage broker industry, not the banks or the mortgage bankers, that fought the good fight for this important piece of consumer legislation. Study after study has shown that it is less expensive to obtain a loan through a mortgage broker than any other type of lender and now it will also be more secure.
This is our personal view of the legislation and its actors and does not represent the official position of the Arizona Mortgage Brokers Association. Even with the new law coming into effect in January 2010, you will never be wrong when dealing with a reputable company with a long history in the credit community.