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Mortgage
lender rules gather some support
<>By JEFF TUCKER
THE PUEBLO CHIEFTAIN
<>
Local reaction to the Colorado Association of Mortgage
Brokers' proposal to regulate the mortgage industry is generally
positive.
<>
This week, the mortgage brokers submitted a proposal to the
state Department of Regulatory Agencies that would require brokers to
register
with the state, submit to background checks and pay a $100,000 surety
bond, all
in an effort to curb mortgage fraud.
<>
The Pueblo Association of Realtors backs the mortgage
brokers' measure, saying the statewide Realtors association has been
pushing
for some kind of regulation for years.
<>
"Most mortgage brokers are really good and really
responsible," said Jim Hadley, president of the Pueblo Realtors
association.
<>However, "Some tend to charge more
than they should and
others promise buyers to get the job done but never do," Hadley said.
<>
Hadley said regulation could help weed out unscrupulous
brokers and others who may not be cut out for the business. "We've just
seen a flurry of new people get into the business," Hadley said.
<>
The proposal will likely go before the state Legislature in
January.
<>
Judy Folda, co-owner of Premiere Mortgage in Pueblo, said
she hadn't reviewed the specific proposal, but she thinks some form of
regulation is probably good for the industry.
<>
"Generally, I don't usually look for more government
oversight, but in this case I think it's due," Folda said.
<>Fonda pointed out that Colorado is
one of just two states
that don't have some type of regulatory oversight for the mortgage
business.
<>"I think it will help," Folda said.
"Obviously, people who get licensed can't just open up a shop."
<>
However, the $100,000 bond, if applied to every individual
mortgage broker, may be too steep, Folda said. Others in the real
estate
industry applauded the move.
<>
Ivor Hill, a real estate appraiser, said the proposal goes
further than he anticipated and is a good start to curbing what he sees
as
widespread mortgage fraud in Colorado, including Southeastern Colorado.
<>
Hill is organizing a conference on mortgage fraud expected
to draw at least 300 people and as many as 500 from throughout the
country to
the Union Depot next month.
<>
"(The proposal) goes long way to solving some of these
problems and I think it's a good step forward," Hill said.
<>
In the proposal, the Colorado Association of Mortgage
Brokers lists 18 different cases of fraud in Colorado - including two
cases in
Pueblo County and one in Crowley County - as evidence for the need for
some
kind of regulation.
<>The association admits that many
frauds require the
cooperation of others in the transaction, but in nearly every case a
mortgage
broker is involved.
<>
Hill said he isn't naive enough to believe that regulation
of the industry will solve all of the problems, but believes it's a
good first
step.
<>
"The very fact that they are calling for registration
is encouraging and now they've got the backing of the Colorado
Association of
Mortgage Brokers," Hill said. "I think it's a very, very good sign
and a case where people are saying 'enough is enough' and are doing
something
about it."
<>
The Colorado Association of Mortgage Brokers submitted a
plan last week to regulate the industry in Colorado, one of just two
states
with no such requirements on the books.
<>
The association made the case for regulation based on a
variety of different scams that occur here as well as in just about
every other
state in the Union.
<>
The association believes that regulation may curb some of
the frauds occurring in the state and possibly save consumers, lenders
and
others in real estate hundreds of thousands of dollars - if not
millions -
every year.
<>
The association lists five different scams in its proposal
to the state.
<>
Ivor Hill, a local real estate appraiser who has helped in
the investigation of many mortgage scams in the state, said just about
every
one of them has occurred in Southeastern Colorado.
<>
The association has said that many scams depend on others
involved in the process, but in almost every case a mortgage broker is
also
involved.
<>
Brokers are basically intermediaries between a lender and a
borrower, and in most cases the loan brokered is a home loan, arguably
the most
important investment any one person can make.
<>
The association has proposed that mortgage brokers register
with the state, submit themselves to background and criminal checks and
put up
a $100,000 surety bond. <><>
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