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Area home lenders join call for federal rules
Holly Davis and Colette Laforest used the same word to describe Treasury Secretary Henry Paulson's proposed Mortgage Origination Commission, which would set federal regulations for licensing mortgage lenders like Davis and Laforest: “Great!”
“I think it's a great idea!” said LaForest, a mortgage consultant at the Fulton Mortage Company in Herndon. “We could use a little quality control.”
That became obvious to her, she recalled, when she entered the profession. “I had no experience there myself, but it seemed like something I could do,” she said. “So I called the branch manager of the company that had given me my own loan. He handed me a rate sheet and told me to go out and get some loans! He seemed more interested in sales ability and contacts.
“I had both, since I had sold homes for a builder. Eventually I went to some classes given by a mortgage organization, but it was my own choice and they were not required.
“The company I work for now only hires seasoned loan officers, and I had three years of experience when I came here three months ago.”
She praised the Herndon firm's policy by saying, “The mortgage professional has to affect the clients on the biggest purchase of their lives, and too many do not have a lot of experience.”
“As for that proposal, I think it is great!” exclaimed Davis, assistant vice president at SunTrust Mortgage in Herndon. “We should be held to higher standards, and this plan will help weed out the folks who should not be there. We are dealing with one of the most important purchases anyone can make. You need a license to be a financial planner, an accountant or, of course, to be a Realtor. This is a good thing. The individual who chooses this career and takes it seriously will welcome licensing.”
As a certified mortgage planner, Davis underwent 40 hours of training plus six tests. Steve Hopkins is a certified mortgage planner at Chevy Chase Bank in Reston. He later explained that, as compared to conventional loan officers, “mortgage planners are less focused on interest rates, and more on the long-term effects of the various mortgage programs.”
Davis' reactions were shared by Steve Baugher, executive director of the Virginia Association of Mortgage Brokers and Dave Stevens, president of Long & Foster Affiliated Services (including Prosperity Mortgage).
“I think the commission is not a bad idea,” Baugher said. “We would like to see lending standards for everyone who originates loans.
“Having been in the business for 35 years, I know we need continuity and consistency, so everyone will play by the same rules. As it is, you can get your mortgage anywhere in the country,” for a home purchase anywhere else. As he put it, “People in California can do business with buyers in Virginia, and there are different lending and licensing laws in each state.”
He also praised The Mortgage Reform and Anti-Predatory Lending Act of 2007. Introduced by Financial Services Committee Chairman, U.S. Rep. Barney Frank (D-Mass.), it would establish a licensing system and national registry for loan originators.
“The most important thing is that you could track these individuals by their licenses,” Stevens said. “As it is, if you are a mortgage company with 100 officers, and one of them does something bad, he can go across the street and continue the same practices, without his bad record following him. If the loan officers are licensed, you can revoke the license. That's how you can deal with the bad apple.”
He also predicted that the federal standards would include educational requirements.
Prosperity Mortgage loan officers are licensed in Maryland, he said, where educational qualifications are required.
While mortgage brokers need a state license in Virginia, the loan officers who work for them do not, Baugher explained.
Stevens said he has worked for a long time to change that. “I spent many years at Freddie Mac,” he recalled. “We worked for a decade on an agreement for national licensing of all loan originators.
“I think this commission is not a bad idea. We would like to see lending standards for everyone who originates loans.”
The Fairfax County Public Schools adult education program is offering a course on becoming a loan processor/loan officer. The instructor is Agnes Ginoba, president of H&R Mortgage in Falls Church. Ten three-hour sessions start at 7 p.m., Wednesday, May 14 at Marshall High School in Falls Church, and tuition is $399. For more information, call 703-658-1219.
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