Legislation to address mortgage industry introduced in the Senate
LANSING-Legislation is being introduced in the Senate that will help address some of the problems within the mortgage industry by individually registering loan officers and helping prevent bad actors from freely operating in Michigan, said Sen. Randy Richardville, sponsor of the reform plan.
"Problems within the mortgage industry are burdening homeowners across the state and nation," said Richardville, R-Monroe. "The nationwide foreclosure rate is skyrocketing and Michigan continues to be in the top 10 states. Requiring loan officers to become registered is a common sense approach to a real problem."
The Michigan Loan Officer Registration proposal seeks to ensure responsibility through accountability by requiring mortgage loan officers brokering or originating loans in Michigan to individually register with the Office of Financial and Insurance Services.
"Buying a home is one of the most important financial decisions an individual can make," said Richardville. "It is important that homeowners be reassured that their mortgage loan officer has the proper qualifications."
The legislation will:
Create a seven-member Mortgage Industry Advisory Board;
Prohibit a mortgage broker or lender from paying a commission to unregistered loan officers;
Establish educational and application requirements for becoming a registered loan officer;
Develop standards for the registration renewal process, including continuing education;
Require employers to conduct a criminal records check on mortgage loan officers;
Specify prohibited loan officer conduct;
Set penalties for loan officers who violate the law; and
Urge the OFIS to continue participation in the states-based development of the Nationwide Mortgage Licensing System.
The Michigan Mortgage Brokers Association, Michigan Mortgage Lenders Association and OFIS attended today's news conference at the state Capitol. The organizations took an active role in the development of the legislation.
"With more than 30,000 mortgage loan officers conducting business in the state, the vast majority possess integrity and professionalism," Richardville said. "We must say goodbye to the bad actors once and for all. This legislation will do just that by complementing efforts taken at the federal and state level to curb fraud and reduce foreclosures."
In May, the Michigan Senate passed legislation that prohibited the practice of appraisal coercion. This new loan officer registration proposal is another tool to help address mortgage problems in Michigan.
The measures will advance to the Senate Banking and Financial Institutions Committee, chaired by Richardville, after their official introduction in the Senate on Thursday.
The committee has been focusing on problems within the mortgage industry this fall. John Ryan, executive vice president of the Conference of State Bank Supervisors, today testified before the committee regarding current state and federal mortgage regulatory efforts.
Posted: Wednesday, October 10, 2007
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