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January 2, 2008

Mass., R.I. have new way to track mortgage brokers

WASHINGTON -- Seven states, including Rhode Island and Massachusetts, today launched a standardized and mandatory process to more thoroughly license and track tens of thousands of mortgage brokers.

The effort could be expanded upon by Congressional Democrats, who are expected in 2008 to continue pushing for tighter national standards.

Mortgage brokers have come under scrutiny over the past year as home loan defaults grew and housing market troubles worsened. Experts say loose licensing standards made it easy for shady operators -- even those with criminal records -- to work in the business.

While mortgage regulations vary dramatically from one state to another, the new system creates a uniform application for mortgage brokers and a database that banking regulators, and eventually consumers, can use to track down brokers who try to work in one state after being banned from another. Consumers should have access by next year.

In addition to Massachusetts and Rhode Island, the initial states participating are Idaho, Iowa, Kentucky, Nebraska and New York. In total, 42 state agencies -- including those in Washington, D.C., and Puerto Rico -- have committed to joining by the end of 2009,
The system is mandatory for brokers doing business in those states, and brokers can be penalized for operating without a license.

Read more about the licensing system in Rhode Island ...

-- The Associated Press

Posted by Mike McKinney  at 4:44 PM | Permalink

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