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Tuesday, July 08, 2008

Ind. Law - "Deadline looms for lenders, mortgage brokers must pass test"

Secretary of State Todd Rokita held a press conference yesterday and at least four Indianapolis newspapers have original coverage, rather than relying on a wire service.

Bryan Corbin of the Evansville Courier & Press reports in a story that begins:

INDIANAPOLIS — More than two-thirds of Indiana's mortgage broker companies could lose their licenses for not complying with a 2007 state law intended to clean up the industry in the wake of the subprime lending and home foreclosure crisis.

The 2007 law said that each licensed mortgage loan broker had to have one principal manager, someone with three years' experience who had passed a state examination. Of 950 affected loan brokerages statewide, principal managers at 639 of them still had not taken the exam by the law's July 1 deadline, officials said.

Indiana Secretary of State Todd Rokita, whose office regulates the broker industry, said he is giving principal managers a 30-day grace period, until Aug. 5, to pass the exam, or he will revoke their companies' licenses. Without a state license, mortgage companies can't write loans to homebuyers.

"The General Assembly has said this is how Indiana intends to operate," Rokita said.

"Especially when we have a loan crisis on hand, we are going to hold loan professionals up to a higher standard — and part of that standard is a competency test."

The law applies to third-party brokers who shop around for the best loans, not to mortgage lenders such as banks.

Rokita and state securities commissioner Chris Naylor said mortgage brokers had ample warning of the new requirement: The Legislature passed the law last year, and Rokita's office sent the companies warnings about it and held several public meetings.

Here are other stories from the Louisville Courier Journal, the Fort Wayne Jurnal Gazette, and the Indianapolis Star.

Posted by Marcia Oddi on July 8, 2008 09:54 AM
Posted to Indiana Law