Current Issues
Merkley-Klobuchar Amendment Creates Level Playing Field
The Senate has passed an amendment to the Wall Street Reform bill that would ban loan originators from accepting compensation based on placing a consumer in a higher interest rate loan or a loan with less favorable terms. The amendment also requires lenders to underwrite loans to assure a homeowner’s ability to repay the loan.
As [...]
Who is and Who is Not Passing the New Loan Originator Exam
I’ve had a chance to meet many loan originators during the past 5 months while teaching the required 20 Hour SAFE Comprehensive Pre-licensing and Exam Prep Course.
Currently, loan originators in WA State who have not been previously licensed are going through the licensing and testing phase which includes the required 20 Hour Course, mandated by [...]
Mortgage Lead Generation Firms Continue to Violate Federal and State Laws
So here we go again. Now that mortgage rates are headed up, the deceptive lead generation ads are crawling back onto the web. Here’s a great example from a Google ad:
FHA Refinance 4.0% Fixed
$160,000 FHA mortgage for $633/mo. No SSN req. Calculate payments now!
MortgageRefinance.LendGo.com
When clicking through, the lendgo.com lead generation site asks some simple questions like [...]
To the Students from the March 29-31 Prelicensing Class in Bellevue, WA
Hi Everyone,
Here are the Q&As from Day 1.
There was a question about Errors and Omission Insurance available for loan originators. In doing research, I see that carrying this type of insurance is a requirement already in some states and in those states, insurance carriers have stepped up to offer the product. I can forsee a [...]
LOs Who Attack Realtor Commissions Might Want to Look Inward
I was just asked to proof a very agressive manifesto penned by a mortgage broker who was attacking the, in his words, “outrageous” commissions Realtors make when helping people buy and sell a home. It made me wonder why the LO was so angry with Realtors in general.
Any Realtor who reads the article in its current [...]
The Financial Crisis Inquiry Commission is Interviewing the Wrong People
The Financial Crisis Inquiry Commission is currently interviewing bank CEOs in order to examine the cause of the current financial crisis. So far, it sounds like the bankers are very concerned about their bonuses and are shirking off the cause of the financial crisis as a nothingburger.
We keep hearing the bankers say “We need to pay out big bonuses [...]
New National LO Exam Pass Rate 69%
The pass rate of the new national LO exam is 69%. Between July 30, 2009 and November 30, 2009:
10,421 national exams were taken and 7,219 passed the exam. The report PDF is available here.
This means the new national exam is too easy, like I surmised back in June. Or is it?
What would be more helpful to [...]
Will Currently Licensed LOs Have to Take the New National LO Exam?
The National Mortgage Licensing System (NMLS) will be taking over licensing at the end of July 2009. The old LO exam will phase out and new LOs will also take a new state exam with new test questions on WA State laws. NMLS chose the same test vendor, Promissor, recently purchased by Pearson Vue. The [...]
13Jul2009 | mf | 0 comments | ContinuedDeadlines for Licensing, Testing, and Education Under the SAFE Act
Deadlines for WA State Mortgage Brokers and LOs. Other states may have different deadlines:
July 30, 2009
LOs licensed under a broker who take/took the (existing) LO test before this date don’t have to pass the new test with 75% until the end of 2010. You can also add up the continuing ed classes you’ve taken over [...]
Paramount Equity Consent Order
Paramount Equity has settled their case with the Washington State Department of Financial Institutions. Read the Consent Order here. The Statement of Charges outlined many, many violations of state and federal law:
Using the term “mortgage bank” in their radio ads. Paramount Equity is not a bank and they are not permitted to use the words [...]
15May2009 | mf | 20 comments | ContinuedDFI Speaks Out on Loan Modifications
From the Washington State Department of Financial Institutions:
DFI Advises Homeowners To Verify The Licenses Of Anyone Offering Loan Modification Services Before Hiring Them
OLYMPIA – The Washington State Department of Financial Institution’s Consumer Services Division advises homeowners who are delinquent on their mortgage to be cautious about using the services of someone offering to help them [...]
MILA’s Bankruptcy
The bankruptcy trustee in charge of MILA’s Chapter 11 case says there is evidence that MILA’s founder and CEO allegedly collected $32 million from MILA during the years before its demise, “improperly draining the Mountlake Terrace company’s assets as its fortune declined.”
From the Seattle Times:
“I think the executives at MILA knew by 2004 that this bubble was bursting and [...]
Loan Modification Fees: Is it Justifiable for a Fiduciary to Charge for a Free Service?
Mortgage brokers and loan originators have become curious in learning about loan modifications. When I ask why, they say that they’re hearing there’s good money to be made doing loan mods. What? Wait a second. I thought loan modifications were done by the lender for free.
More and more spam is popping up in my spam bin targeted at LOs and [...]
National Loan Originator Licensing coming….For ALL LOs
Tucked inside the Foreclosure Rescue Bill signed by the President yesterday is a provision calling for all loan originators to be licensed. Bankers, brokers, consumer loan lenders, and credit unions; it doesn’t matter where you work. If you’re an LO you must pass a competency test that will be developed by the National Conference of [...]
31Jul2008 | mf | 55 comments | ContinuedNational Loan Originator Licensing
The “Federal Housing Finance and Regulatory Reform Act of 2008? is here. Read the PDF if you’re feeling ambitious or here is the summary of the Dodd amendment. There’s a section inside Senator Dodd’s amendment that will give us national loan originator licensing. On page 34, the definition of a loan originator is as follows:
LOAN ORIGINATOR
A) IN GENERAL
The term [...]
Distressed Property Law
Mortgage Brokers and Loan Originators are exempt from becoming a “Distressed Home Consultant” when helping Distressed Homeowners refinance, unlike real estate agents who are subject to increased liability under the new Distressed Property Law. My question is, SHOULD mortgage brokers and loan originators be exempt? Please read this blog post and share your opinion. I [...]
18Jun2008 | mf | 60 comments | ContinuedWA State Cracks Down on Title Insurance Company Inducements
Mortgage brokers, loan originators, and real estate agents have all been warned NOT to accept any inducements from title insurance companies. Giving OR receiving an item of value in exchange for a referral of a federally related loan is already illegal under RESPA. However, HUD auditors do not routinely wander around inside real estate offices [...]
18Jun2008 | mf | 55 comments | ContinuedHUD Audits A Plus
Please read this brief blog article on the A+ Mortgage recent HUD Audit.
Analyze the A Plus Mortgage response to HUD’s findings on pages 19-24, and HUD’s comments which follow.
Question: You’ve just been hired to manage the loan originators at A Plus. What’s your action plan?
The Giant Pool of Money, by TAL and Chicago Public Radio
This NPR radio episode runs just under 54 minutes. Click on the “download” button; it will take several minutes to download. While you’re waiting, browse through some of our other articles on Ethics in Mortgage Lending!
In order to better understand why we are currently facing massive mortgage loan defaults of epic proportions, this radio program takes us [...]
Update on the May 7 Mortgage Broker Commission Meeting and SB 6471
At the beginning of every law, there’s a preamble and then a set of definitions. Many of you know this: A mortgage broker is not a lender.
A lender is defined by federal law, RESPA, as an entity that makes loans. This means the entity has the money to fund the loans.
Brokers, by definition do not [...]
WA State Legislative Changes: SHB 2770, SB 6471, SB 6381
The Washington State Legislature has passed three new laws that will go into effect June 12, 2008.
SHB 2770
Governor Gregoire’s legislation implementing the recommendations of the Homeownership Task Force. This legislation impacts Banks, Credit Unions, the Consumer Loan Act (CLA), and the MBPA. The bill addresses prepayment penalties, negative amortization loans, the federal guidance on nontraditional [...]
home renovation these days are quite expensive due to the rise in material cost~:; 
Hi Linda,
How did your score sheet break down where you scored strong and where you scored weak? That will give ...
I took the national LO exam today and I did not pass. My score was a 72%-Graded from 90 questions. ...
Whatever happened to a customer getting a gfe and shopping for a best rate and price for them? I ...
By the way...sorry for such the long post for those who read it...had alot on my mind...obviously. 
Hi Jillayne,
I hope everything's good with you.
Well, Jonathan Foxx of Lenders Compliance Group has begun a series of articles regarding ...