New Law To Regulate Mortgage Professionals

On March 9th Washington State’s Governor Christine Gregoire signed House Bill 2340 which will regulate all Loan Originators in the brokering of residential real estate loans. According to Washington Association of Mortgage Brokers the new legislation requires the following:

  1. All Loan Originators will need to pass a basic compliance skills examination prior to January 1, 2007;
  2. Continuing Education will be required on an annual basis;
  3. Background checks will be required prior to licensing, removing felons’ and person with criminal histories that do not warrant the public’s trust.

Washington Association of Mortgage Brokers (WAMB) also states:

(The licensing) creates new consumer protections by raising the bar for practitioners in our industry by achieving two key objectives: 1) it will help weed out those in the industry who do no have the consumer’s best interest in mind and creates a revocable license for those that employ unethical and illegal practices; and 2) it will strengthen our industry by exposing educational opportunities needed for brokers that care about doing things right, but may be lacking the knowledge to remain compliant in accordance with State and national regulations.

WAMB provided some interesting facts about other states that have implemented a licensing requirement:

  • In Ohio 10% of loan originators were removed due to felony convictions.
  • In Utah 25% of loan originators never passed a basic compliance skills examination.
  • Many “out of state

Your Credit Score has Changed

Just as I was getting use to the old algorithm, now a new algorithm!

The nation’s three consumer credit reporting companies – Equifax, TransUnion and Experian – announced a new credit scoring system designed to simplify and improve the credit process for both borrowers and credit grantors.

By combining cutting-edge, patent-pending analytic techniques with a highly intuitive scale for scoring, VantageScore will provide consumers and businesses with a highly predictive, consistent score that is easy to understand and apply. VantageScore uses score ranges from 501 to 990.

There is more information on VantageScore here: VantageScore.

There has been much talk about providing borrowers and business with a more consistent method of evaluating credit. For even the most experienced people in the lending industry, credit scoring is a confusing subject. A few weeks ago I gave a presentation with Mark Armstrong, American Reporting Company to a group of real estate agents, and my impression was that they seemed starved for accurate information on the subject of credit. In the next few days, I will post parts of that presentation here.

UrbanDigs has more.

My Home

“Where we love is home, home that our feet may leave, but not our hearts.”
~Oliver Wendell Holmes

My heart will always be connected to the place my daughters where born, and where my wife and I have watched them grow. There are a thousand memories that have blended with this place. In many ways our home feels like a trusted partner that has help us along the way.

Follow the Money…

Have you ever wondered where mortgage money comes from? Years ago, the money came from your local banker. If your credit was good, and the bank had the available funds, you had yourself a home loan, and you diligently made your monthly payment to that same bank.

These days, the majority of all conforming home loans begin the same way as they did years ago, but they now follow a trail that most often leads to three major institutions: Fannie Mae (Federal National Mortgage Association); Freddie Mac (Federal Home Loan Mortgage Corporation); or Ginnie Mae (Government National Mortgage Association), then on to Wall Street.

Please understand that there are many variation of this, and I’m speaking of standard conventional loans. Depending on a many circumstances, some loans follow different pathways.

We begin the process with a mortgage professional as we always have. We answer the questions, jump through the hoops, and sometimes feel our whole life is being reviewed, but all goes well, and we end up with a home loan. Now it’s here that the trail can take some turns.

If you placed your loan with a bank, it frequently appears that your loan is still with that bank, but in most cases the bank is simply “servicing