Friday, September 11, 2009

REAL ESTATE COMMISSION DEACTIVATES 4,560 MORTGAGE BROKER LICENSES

When discussing the ups and downs of the past decade in the Colorado housing market, one subject that always comes up is Colorado's relatively lax history with real estate regulation.

Specifically, until 2007, Colorado was one of only two states (Alaska being the other) where there was absolutely no licensing, training or education requirements for mortgage brokers.

One day out of Supermax? Become a mortgage broker!

Thankfully, those days are behind us.

In August of 2006, Erin Toll was appointed director of the Colorado's Division of Real Estate. Since then, the hammer has been coming down hard on brokers, appraisers, builders and anyone else who plays a role in Colorado's real estate industry.

In 2007, Colorado instituted a registration program for mortgage brokers, and in 2008 the state put a full licensing program in place. As part of that program, mortgage brokers were subjected to background checks and required to take 40 hours of licensing education. They also had to pass what many mortgage brokers have told me was a pretty wicked licensing exam (anybody want to amortize a 30-year loan without a calculator?).

The result?

On August 31, Toll deactivated 4,560 mortgage broker licenses - or roughly 50% of those issued by the state - for failure to complete the division's licensing requirements.

What does this mean? It means that if your mortgage broker is still around, he or she is probably pretty competent.

And if you can't find your old mortgage broker, chances are he or she is working in Alaska.