| When homeowners are sold a home or given a loan | | | | have a difficult time proving its right to foreclose on a |
| by unlicensed representatives, it may help their | | | | property. And it may be vastly easier for borrowers to |
| foreclosure lawsuit defense to raise these issues in | | | | show conspiracy or predatory lending if parties acted |
| court. Governments throughout the country have | | | | together to create a situation in which it was |
| imposed so many requirements on any person | | | | impossible to pay the loan. |
| attempting to do business in banking, real estate, and | | | | Mortgage brokers and real estate agents are currently |
| mortgage lending, that it is almost too easy to find | | | | licensed at the state level. There has been some talk |
| licensing violations. This is the good part about licensing | | | | of creating new federal mortgage broker licensing |
| laws for homeowners defending against foreclosure. | | | | regulations, but this has not been put into place yet, and |
| The bad part is that, despite all this government | | | | it is unlikely that the federal government will take over |
| regulation, criminals can and do find their way into the | | | | this much power from the states. Various federal |
| lending industry and defraud large numbers of | | | | agencies, though, do investigate financial and white |
| homeowners. Now that the economy has collapsed, | | | | collar crimes and may have some jurisdiction over |
| some states have purged hundreds or thousands of | | | | practices engaged in by a mortgage or foreclosure |
| mortgage licensees from the rolls who either had | | | | scam company. Appraisers are similarly licensed at the |
| shady backgrounds or did not keep up on the | | | | state level, if at all. |
| requirements to hold a license. And all of the costs of | | | | Banks may be licensed either by the state or the |
| licensing are passed along to the end consumers who | | | | federal government, depending on how large the |
| buy properties and take out loans to finance them. | | | | institution is, how many states it operates in, and if it |
| Thus, simply being licensed is really no guarantee of | | | | decided to be a federal or state bank. Banks, though, |
| legitimacy or good faith dealing. And governments are | | | | will often be regulated at both levels to some degree. |
| often not equipped to go after small companies that | | | | The largest banks will be regulated more at the federal |
| break licensing laws, because it will cost the state | | | | level by the Federal Reserve and the Office of the |
| much more than they can ever recover by | | | | Comptroller of the Currency, while smaller banks will be |
| prosecuting individuals not operating a scam on a large | | | | licensed and overseen by state banking departments. |
| scale. Small time crooks who sell a few predatory | | | | Although filing complaints with the proper regulatory |
| loans may cause individual families thousands of dollars | | | | agencies may not help in a current foreclosure lawsuit, |
| of damage, but may be too small of white collar | | | | especially if the unlicensed party has left the business |
| criminals for government regulators to dedicate many | | | | and left town to avoid prosecution, it may help prevent |
| resources to catch and prosecute. | | | | that person from taking advantage of others in similar |
| However, it is still a good idea for homeowners to | | | | businesses and situation. As well, if homeowners can |
| make sure that every party they deal with during their | | | | show that they were given a loan or sold a home by |
| mortgage transaction is properly licensed. If they find | | | | someone without a license, it may help bolster the rest |
| out that no license was in place, and the lender knew | | | | of their case as to why the foreclosure is invalid. |
| about this factor or should have known about it, it may | | | | |