States Act to License Originators of Loans

Miami Herald (07/21/08); Haggman, Matthew; Barry, Rob
Over the past three years, more than a dozen states have passed laws requiring all mortgage professionals, except those who work in banks, to obtain a license. And some bar convicted felons from selling home loans, via such laws as one Colorado passed this year. The move to create minimum standards, including criminal background checks and exams, for originators was prompted by the growing mortgage fraud crisis. "The guy who owns the company was licensed, but the people who get the confidential information, who meet with the borrower, who originate the loans are not," Illinois mortgage regulator Dean Martinez says of the situation in his state, where about 15,000 of 25,000 applicants have been approved following the 2003 passage of a law requiring loan originators to be licensed and pass background checks.