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September 08, 2005


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JB Graves

Great article! I'm a real estate broker in NC and I have been happy with our state lending practices to this point. I appreciate your article and will be posting a link to your blog from my own.

Mary Bresnan, Student, Hofstra Law School

I'm currently writing a paper comparing the Ney-Kanjorski and Miller-Watt bills. Have you seen this article from National Mortgage Banking News, claiming that Ney has stated that his bill will merely set minimum standards? I found it to be a shocking statement, and have been unable to find anything to support this contention? NMB must have gotten it wrong.
What do you think?

2 of 1177 DOCUMENTS

Copyright 2005 American Banker-Bond Buyer a division
of Thomson Publishing Corporation
National Mortgage News

October 10, 2005

SECTION: Vol. 30; No. 2; Pg. 2

LENGTH: 850 words

HEADLINE: Bill Doesn't Pre-Empt Licensing


A predatory lending bill that calls for licensing mortgage brokers would not pre-empt the states from adopting stricter standards or the licensing of loan officers at banks and mortgage companies.
The predatory lending bill, sponsored by Reps. Bob Ney, R-Ohio, and Paul Kanjorski, D-Pa., would pre-empt state predatory lending laws in a establishing a national lending standard for high-cost subprime loans.
However, House Financial Services Subcommittee chairman Ney said Title V of his bill creates "minimum stan-dards" for mortgage broker licensing. Title V is not pre-emptive and does "not in any way limit the ability of states to go beyond those requirements for stricter standards," Rep. Ney said.
The bill (H.R. 1295) actually gives the states three years to pass a licensing requirement for mortgage brokers, be-fore licensing becomes mandatory under H.R. 1295.
The Mortgage Bankers Association generally supports the Ney-Kanjorski bill and the licensing of mortgage bro-kers, but they are concerned it would not prevent the states from licensing loan officers at mortgage companies.
Teresa Bryce, co-chair of MBA's state licensing task force, testified that the mortgage broker industry is in "great need" of licensing standards and a national database of licensed mortgage brokers would be very useful.
However, she complained that states are requiring licenses for loan officers and other personnel, even though mort-gage banking companies are licensed at the corporate level and highly regulated.
These additional licensing requirements are burdensome, Ms. Bryce said, adding to the cost of originations and placing state-licensed lenders at a competitive disadvantage to federally chartered lenders, which are exempt from state licensing.
"Unfortunately, Title V will do little to help mortgage bankers manage the thickening web of burdensome state li-censing laws," she said. "MBA encourages the committee to study possible federal initiatives that will assist mortgage bankers when dealing with state-level corporate licensing laws." Ms. Bryce is a senior vice president at Nexstar Finan-cial Corp., St. Louis.
The National Association of Mortgage Brokers also supports licensing of mortgage brokers and a national mort-gage broker registry. However, NAMB believes all loan originators should be licensed whether they work for a bank, a mortgage banking company or a broker.
NAMB past president Joseph Falk told the committee that loan officers move freely from broker shops, to banks and mortgage companies.
"A database of only state-licensed mortgage brokers would not prevent an unscrupulous actor ejected from one state's licensing structure from freely moving to another state," he testified.
Rep. Stephanie Tubbs Jones, D-Ohio, pointed out that most homebuyers, particularly low-income and minority homebuyers don't know there is a difference between mortgage brokers and loan officers. The congresswoman said both should be licensed.
North Carolina banking commissioner Joseph Smith Jr. told the House panel that the effectiveness of a national registry would be "dramatically reduced" if it does not list all originators who take mortgage applications from consum-ers.
"There should be a national data base of all originators so that bad actors caught in one state cannot easily go to an-other state," he said. Otherwise, "bad actors will be able to move among jurisdictions and employers, including exempt enterprises, such as banks and thrifts." Mr. Smith testified on behalf of the Conference of State Bank Supervisors.
CSBS and the American Association of Residential Mortgage Regulators currently are working an on Web-based registry of state-licensed mortgage companies, loan officers and mortgage brokers (see related story).
The American Bankers Association supports the licensing of independent mortgage brokers, according to Stephen Hailer, president and chief executive of North Akron (Ohio) Savings Bank. However, banks are subject to "rigorous government oversight and examination" and licensing bank loan officers is unnecessary, Mr. Hailer testified.
Subcommittee chairman Ney held the hearing on Title V because the licensing has become contentious.
He noted at the start of the subcommittee hearing that the bill is designed to protect consumers from predatory lend-ing practices and from bad actors who take advantage of borrowers.
"We must keep in balance the cost to lenders of licensing and registration and benefits the borrowers receive from those requirements," Rep. Ney said. The congressman did not indicate any plans to change the licensing requirements at the Sept. 29 hearing.
Rep. Ney is not expected to push for a House Financial Services Committee vote on the predatory lending bill this year.
However, Reps. Ney and Kanjorski are expected to work behind the scenes to forge a bipartisan consensus so the predatory lending bill will be ready to move when Congress returns next year.
(c) 2005 National Mortgage News and SourceMedia, Inc. All Rights Reserved. http://www.nationalmortgagenews.com http://www.sourcemedia.com

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Frances Flynn Thorsen

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