| State Sen. David J. Cappiello, R-Danbury,
is calling for the licensure of all state mortgage loan originators.
According to Sen. Cappiello, while current state law requires
all mortgage lenders/brokers to be licensed with the state
Department of Banking (DOB) the same does not hold true for
loan originators - the individuals who actually sell and negotiate
the mortgage loan to consumers. Loan originators are simply
required to be registered by their mortgage company. No experience,
education or training is required for them individually. Sen.
Cappiello said that he is planning on raising legislation
next session that would create licensing standards for all
loan originators to adhere to. “Buying
a new home is one of the most important decisions someone
can make. People need to be assured that when they are receiving
advice from a mortgage loan originator they are getting
it from someone who is qualified to sell them the loan.
Currently there are no set standards in place, so someone
with absolutely no background can get hired by a mortgage
company and sell mortgages,” said Sen. Cappiello.
“I believe at the very least we need some minimal
standards. Right now we are witnessing throughout the country
a lot of people who have received bad advice from their
mortgage loan originator. These people can no longer afford
to pay the mortgage they agreed to and are being forced
to foreclose.”
Sen. Cappiello says his initiative will
focus on providing a mechanism to increase consumer confidence
as well as increasing the accountability of mortgage providers.
He wants the DOB to create regulations that will allow them
to take away someone's license if they are found to be involved
with unscrupulous practices “People need to know that
the person they are dealing with to finalize their mortgage
is educated and trained in this field, and that assurance
comes with a license.”
For over 10 years, Sen. Cappiello has
been working as a loan originator and says that much of
the industry is based on referrals and recommendations,
but that not all consumers know where to turn. “Most
people in the business of providing home loans are hard-working
and decent people. But as we are beginning to see there
are also some who have taken advantage of people and these
people have been stretched beyond their means.”
“Right now there are no minimal
standards for loan originators,” said Sen. Cappiello.
“In my opinion this issue will become even more prevalent
as the housing market continues to change. In order to give
consumers who might be financing or refinancing their home
mortgage the peace of mind they deserve, we need to have
in place a licensing system that provides training and education
to those who provide this service.”
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