| Loan Officer Licensing may be a required very soon in | | | | although many consumers have tried to argue against |
| all states. Loan Officer Licenses among other things | | | | the legality of this type of payment in court. Making this |
| have been introduced to in the Congress as a may to | | | | fee illegal would possibly force many mortgage |
| reduce fraud and increase responsiblity nationwide. If | | | | brokers out of the business. |
| passed, this bill would require all states that do not | | | | Representatives Introduce Mortgage Reform |
| currently have a loan officer licensing scheme to set | | | | Legislation |
| one up. Over 30 states have already adopted a | | | | Representatives Brad Miller (D-NC), Mel Watt (D-NC) |
| license scheme for loan officers in the last 5 years. | | | | and Barney Frank (D-MA)introduced "The Mortgage |
| This bill may force the remaining states to follow suit. | | | | Reform and Anti-Predatory Lending Act of 2007" on |
| With the Nationwide Mortgage Licensing System being | | | | October 22, 2007. |
| organized at the same time, it could all come together | | | | Key provisions of the legislation include: |
| very nicely to make it simple to obtain the loan officer | | | | · Establishment of a federal "duty of care;" |
| licenses needed for each state. | | | | · Required licensing for all mortgage originators, |
| Other items intersting with this bill are possible | | | | including brokersand bank officers; |
| provisions for eliminating the Yield Spread Premium | | | | · Minimum standards to ensure a borrower's |
| (YSP) earned by the licensed mortgage broker. | | | | ability to repay; |
| Currently most mortgage brokers earn about half of | | | | · Expanded and enhanced consumer |
| their fees on the "back-end" from the lender. This has | | | | protections for high cost loans underthe Home |
| been considered legal by HUD regulation, specifically | | | | Ownership and Equity Protection Act (HOEPA); and |
| the Real Estate Settlement Procedures Act (RESPA) | | | | · Foreclosure protection for renters. |