If you are a mortgage broker you are quite aware the government has made Broker shops the bad guy. The government and big banks blame brokers for all the fraud and bad loans that took place.The most interesting fact about all of this is the banks, Freddie Mac and Fannie Mae were setting the underwriting standards. Brokers just delivered those underwriting standards and the loans were bought and sold on the secondary market. To this day I have not figured out why Brokers have been so heavily targeted other than big banks making deals with Washington to squeeze out the competition.
As a result of all of these issues tough regulations have been forced on Mortgage Brokers. All loan officers now need to pass a national exam along with a state exam under the SAFE Act of 2008. This new regulation requires a background check along with your local state regulator receiving a copy of your credit report. This new credit report requirement has caused anxiety within the loan officer community This concern comes with good reason. Most loan officer’s income starting in 2007 went from a 6 digit income to an income that was just above poverty level.
We are not completely sure how many credit issues on your report will cause a denial of your license. Each state regulator will be responsible for reviewing your credit report and determining how responsible you are with your finances. According the State of Texas Commissioner multiple issues of following will trigger a state review of your credit report.
• Bankruptcies files within the last 10 years;
• Current outstanding judgments (except judgments solely as a result of medical expenses);
• Current outstanding tax liens or other government liens
• History of and current collection accounts;
• Foreclosures within the past three years;
• Three or more accounts more than 90 days past due;
• Multiple Social Security Numbers attached to the individuals name;
• Consumer provided comments
• No credit history for the individual;
• Credit items the individual is appealing, if noted in the report; and
• Outstanding child support
Also according to the commissioner they will not be looking at your credit score, but systematically looking at your overall long term financial irresponsibility before they make a final decision.
The guys over at ThinkBigWorkSmall did a video today on this very subject. They give a very humorous illustration of this credit report scare. So this should be very interesting considering how many possible loan officers have credit issues due to the market and not because of irresponsibility.
Author: Mike Clover
CreditScoreQuick.com
