Housing and Economic Recovery Act of 2008
Senate passes H.R. 3221
This recently passed legislation is meant to assist at-risk homeowner as well as stabilize the mortgage market. Some of the key highlights are:
1) Modernization of FNMA, FHLMC and FHA
2) Increases in FHA loan limits
3) Increases the cap on mortgage loans Fannie and Freddie can purchase
4) A nationwide loan originator licensing and registration system
It’s this last change that I find the most intriguing as well as the most needed. It’s about time that originators be tracked, monitored and licensed. In almost all states its more difficult to obtain a Real Estate license then it is to become a loan officer/originator. Most Real Estate professionals must attend and pass state certified courses/exams as well as be licensed in the state they wish to conduct business.
To become a loan officer/originator it’s as simple as filling out an application with a broker and in some cases passing a police background check however this is NOT enough to deter someone from commiting fraud. What has always been missing is the accountability of loan offficers/originators in the mortgage industry. The fact the Real Estate Brokers are required to have education and training for simply selling homes and loan officers/originators who are managing borrower’s financials and negotiating the largest purchase most borrowers will make in their lifetime are NOT required to be educated, licensed or monitored by any government agency makes no sense at all.
Tracking loan officers will most certainly improve accountability and greatly reduce the amount of fraud being perpetrated by the few loan officers who don’t take this profession seriously and view it as a “hustle”. I certainly feel that having accountability for loan officers is long overdue.
