State will get tougher on mortgage brokers in Vail, Colorado
VAIL, Colorado When I went into the mortgage brokerage business on my own four years ago, I established lending sources, printed business cards, hung a sign on the door and started brokering mortgage money to clients. One of my first lenders referred to Colorado as the Wild West of the mortgage industry. Being a mortgage broker was that simple; there were no licensing or insurance requirements. For the better, Colorado is no longer the uncontrolled and unregulated Wild West of the mortgage industry.Effective Jan. 1, all mortgage brokers, or those brokering loans in Colorado, will be required to have the following: $100,000 of errors and omissions insurance, $25,000 of surety bonds, 40 hours of online or classroom mortgage lending education and successful completion of a licensing examination. At long last, Colorado mortgage brokers must be insured, educated and licensed.The fact that brokering mortgage loans in Colorado was such an easy and simple process for so long undoubtedly exacerbated the current turmoil in the housing market because it was too easy for unethical, uneducated and deceptive brokers to do business. Current requirements are strict, time-consuming and costly, making the entire approval process no easy task.For borrowers and clients, this means a great deal. Those working with mortgage brokers can now be fully assured that they are working with a credible, ethical and licensed lender. Borrowers can and should trust that mortgage brokers are serious about their business and have taken the necessary steps to fill the stringent requirements.Such stringent requirements are evidence that the mortgage industry is in the midst of monumental changes on every level. However, mortgage brokers still play a vital role in the future health and prosperity of the mortgage and real estate industries in the country as a whole and in Colorado. Brokering mortgage loans is becoming a bit more of a unique and niche business these days. However, brokers still have the benefit and advantage of representing a number of different lending and funding sources with various rates, products and program criteria. Educated, licensed and ethical brokers with the ability to do business with numerous lending sources helps ensure that borrowers have the best product and rate available at current market conditions. Needed changes and corrections such as these are evidence that the business of mortgage lending is getting on the right track. Colorado mortgage brokers will probably be a much smaller group of business folks in 2009, but they will also be much savvier and more effective. William A. DesPortes is a managing member of DesPortes, Selig & Associates, Professional Mortgage Services. He can be reached at 970-926-9393 or firstname.lastname@example.org.