New Jersey Tightening Reigns on $100 Loan Officers
New Jersey is considering increasing the level of scrutiny placed on mortgage loan officers operating in the state. State Senator Barbara Buono, D-Middlesex is the primary sponsor of a bill that if passed will require training, licensing exams and criminal background checks for loan officers.
While New Jersey is usually viewed as a progressive state, in this area we are really behind the curve. Most of the nation already have regulations that are placed on loan officers.
Other states have adopted similar requirements to deter fly-by-night loan officers. When Illinois enacted its regulations in 2004, 40 percent of the 29,000 applicants flunked the licensing exam. Another 800 failed the background check.
Currently in New Jersey a person only needs to pay a $100 registration fee to assume that role.
Housing advocates are saying that regulation and oversight alone are not enough to ensure the ethics of those working as loan officers. Wouldn't it be better to push the oversight of the loan officers onto the lending institutions that they are working for? By penalizing the lenders for inappropriate loans originated by their loan officers, the onus is placed back where it belongs and can be adequately overseen and enforced.
In the past five years, the number of New Jersey mortgage solicitors nearly tripled -- from 14,476 in 2002 to 42,433 as of earlier this year -- according to the state Department of Banking and Insurance. Average salaries for state loan officers exceeded $63,000 in 2005, Bureau of Labor Statistics show.
Thats sure is a lot of $100 loan officers out there - hmmm a lot of sub-prime loans failing too!
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