Housing Law Cracks Down on Loan Originators

Investment News (08/04/08); Morrissey, Janet
The housing bill that President Bush signed into law last week includes a provision that requires licensing and other strict standards for all loan originators, including background checks, fingerprinting, continuing-education courses and listing on a national registry. The new rules are long overdue, according to the Mortgage Bankers Association in Washington. "As house prices appreciated and mortgage originations jumped to record levels, a lot of people got into the business who didn't have a lot of experience with it or a lot of formal training," says Josh Denney, an associate vice president at the organization. Education and qualification will serve as barriers of entry for the industry, and the fingerprinting and tracking system will help prevent bad actors from moving to other states and committing fraud there, Denney adds.