TALLAHASSEE, Fla. – The Miami Herald reports on June 25, 2010, that after years of lax licensing requirements, all mortgage brokers in Florida – including those who may have just submitted an application – will have to reapply under more probing criteria later this year.
No new applications under the current mortgage broker rules will be accepted past July 8.
Beginning Oct. 1, Florida will join the Nationwide Mortgage Licensing System, and all loan originators, brokers, lenders and mortgage business owners will have to reapply for their licenses. People who don’t apply by July 8 and aren’t already licensed won’t be able to work in the industry until their applications are approved under the new rules.
The expiring license rules required a state criminal background check once, and licenses could be renewed every two years without additional criminal screenings. Licenses could be revoked if mortgage sellers were charged for a crime after that – but the state relied on the brokers to report criminal charges filed against them.
There could be a backlog: Some 46,000 people and businesses have licenses now, said Flora Beal, spokeswoman for the Office of Financial Regulation, so those who want a license under current rules should apply as soon as possible.
It is especially important in Florida to strengthen license requirements, which is first in the nation for mortgage fraud and misrepresentation, according to the Mortgage Asset Research Institute. The Institute also said last month that Florida has nearly three times the expected amount of reported mortgage fraud and misrepresentation for its origination volume.
In 2008, a Miami Herald report, called Borrowers Betrayed, showed that state regulators allowed thousands of people with criminal histories – including armed robbers and cocaine traffickers – to work in the mortgage industry since 2000.
Then, after the series was published, state lawmakers passed laws that toughened mortgage licensing laws, increased penalties and created a special fund for fraud victims. The new requirement for brokers is one of those changes.
Under the licensing rules that take effect later this year, applicants will undergo state and federal criminal background checks and have their credit reports pulled. Licenses will have to be renewed every year.
Along with home prices, the number of licensed mortgage brokers grew as people turned to real estate to make a living. During the boom, there were nearly twice as many licensed brokers as there are now.
The new rules say that different crimes carry different penalties, including lifetime disqualification, said Greg Oaks, bureau chief for licensing. For example, charges or conviction for any type of fraud, robbery, burglary, identity theft, tax evasion or treason could end the possibility of being licensed. Other charges carry five-, seven- and 15-year bans.
In addition, applicants’ credit reports will be inspected for bankruptcies, outstanding tax or other liens, outstanding judgments, foreclosures and charged off accounts.
A credit report blemish wouldn’t automatically disqualify someone from getting a license, however, Oaks said.
“It would be reviewed on a case-by-case basis. We would look at all of the explanations, their application, the totality of all the circumstances,” he said.
The licenses won’t be renewed if an applicant doesn’t meet the same standards required to get their license in the first place – meaning their credit reports and criminal background will be checked annually.
The fees for the new license vary and the state is still figuring out the cost of credit checks and criminal background screenings – which applicants will have to pay for.
To make an appointment to speak with an experienced and qualified attorney about your mortgage broker’s license please call Soreide Law Group at: (888) 760-6552 or visit our website at: www.floridaprofessionallicense.com .