2006-03-15 09:45
Here’s some feedback I received related to yesterday’s blog posting about Colorado’s proposed Mortgage Broker Registration Act (HB 1161). I posted the following question on a discussion board over at BrokerOutpost.com:

Late last week, Colorado’s House of Representatives passed a Bill that–if approved by the state’s Senate and Governor–calls for all mortgage brokers to:

1. Register with the State.

2. Submit to a criminal background check.
3. Disclose any relevant administrative discipline that has ever been taken against them.
4. Post a $25,000 bond.

I’m just curious: what does your state require of you, and how do you feel about Colorado’s proposed law (especially the bonding part)?

Here are the responses I’ve received thus far:

1. It’s about time. CO lets anyone be a broker/LO without any regards to their abilities and no regulation. — Scott from Washington

2. This is to be a broker, not just an Loan Officer, right? Stuff like this makes our work more exclusive and helps justify our pay. If you are still in the biz with a law like this, then you’re probably worth your fees. — Andrew from Massachusetts
3. Kentucky requires a $50,000 bond! — Chris from Kentucky
4. For NY Mortgage Bankers… It is just the cost of doing business. — Martin from New York
5. Georgia requires a $50k bond as well. As an AE, it’s relatively handy in signing brokers up b/c a bond acts in lieu of company financials and shows liquidity. For the broker that doesn’t like to open up his books or even print off a balance sheet it makes things simple. — Scott from Georgia
6. Ohio requires a $50k bond also and there has to be some form of regulation in each state in order to improve the industry. — Dave from Ohio
7. In all seriousness, a $75k or higher bond should be required for a shop to open it’s doors, and it should increase with every originator added to the office. Any Loan Officer caught originating WITHOUT the bond in place should bring a fat fine to the office. Maryland is going to begin a more expensive lic’g process for Loan Officers that would have a fee attached, and part of it will have to be paid again, any time an LO moves to another shop. The hurdles to get into the biz are a joke in most cases. — Steve in Maryland
8. A 25K bond does not cost much of anything to buy… just a couple hundred a year. Bad thing is you have to personally guarantee it. — Corey in Missouri
9. West Virginia requires a $50k bond. Virginia requires a $25k bond. Both cost about $350.00 per year. — Natalie in Virginia
10. The idea that Loan Officers at mortgage companies somehow should have been immune from having the same requirements as Loan Officers at brick and mortar local banks was stupid in the first place. I hope to God that Missouri gets some kind of licensing requirements passed. I will be down there taking the exam the first day it’s available, and I’ll be laughing like a maniac at all the fools who can’t pass the exam or don’t meet background check requirements. — Matt in Missouri

It seems like everyone agrees… a $25,000 bond is a small price to pay to play.

When I’m not out buying or selling homes, or speaking to consumers or real estate professionals about the dangers associated with frauds and scams, I’m either hanging out with my wife and kids or surfing the Internet in search of the next big thing (okay, that’s not entirely true… I do exercise, sleep, volunteer, and do other stuff too, but you know what I mean). Recently, I ran across BrokerOutpost.com, a forum-based web site that allows loan officers and wholesale lenders to connect with one another to ask questions, as well as to do more business together. Founded and operated by a licensed Mortgage Agent, BrokerOutpost.com offers intuitive forums for real estate industry professionals to connect with one another on a variety of topics.

Say, for example, that you’re a mortgage broker. Well, after you complete Broker Outpost’s free registration, you can create a detailed profile with your bio and a link to your company’s web site, which is then instantly added to Broker Outpost’s mortgage broker directory. The directory, which is categorized by state, is targeted toward consumers who find the site, and is helping loan officers and other mortgage industry professionals highlight their products and services, and ultimately secure more business.

But Broker Outpost is much more than a consumer directory. The real value of the site is that it allows real estate professionals to network and learn from one another in a safe, cost effective, easy-to-use online forum environment. All too often, professionals–regardless of what industry they’re in–tend to work in a vacuum… you know the type, don’t you? They’re the ones who operate by the rule “I know best” and “what can anyone else possibly teach me.” Broker Outpost encourages something different. It allows loan officers, mortgage brokers, wholesale reps, processors, realtors, insurance agents, and anyone else who does business in the mortgage and real estate field to check in with one another about any issue or topic, all from the convenience of their office or home computer. The site’s founder and programmer–a software engineer turned Mortgage Agent turned software engineer again named Darin Ferraro–even offers a blog right on the front page of the site.

What’s not to like about BrokerOutpost.com? As far as I can tell, nothing at all. Check it out for yourself by clicking here. Registration is free, and since I recently joined the site, you can now easily follow along with the questions and advice I myself am contributing to the site.