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The situation in Colorado for independent mortgage brokers gets tougher every day. When we posted earlier this month about the decision of Colorado Director of Real Estate Erin Toll to deactivate the licenses of over half of the state's licensed mortgage brokers, due to the fact that those brokers hadn't taken 40 hours of continuing education and passed a written test, we didn't know how difficult a test it was to pass. In an article in last week's Denver Business Journal, Toll was quoted as saying that of the 4,560 brokers whose licenses she yanked, only 85 even took the test and every last one of them flunked it. You'd think that would be a sign of how tough the test was, but there are 4,252 active brokers left in Colorado who, I assume, also had to take the test and who must have passed it. That's a 98% pass rate, so how tough could the test have been? I mean, the California bar examination: now, THAT'S a tough test!

Ms. Toll thinks it's all a matter of consumer protection, and that the people who took the test and failed it are all poorly eductade in the ways of mortgage banking.

"The bottom line is that we are here to help consumers," Toll said. "It?s our job to ensure that loan originators are properly educated so they can act in the best interest of the consumer."

Others feel that "Teacher" Toll is being too tough on the class.

Chris Streiff, director of the Society of Mortgage, Affiliate, Real Estate and Title (SMART) Professionals, attended Thursday?s hearing in support of the brokers.

She said that the study materials don?t adequately prepare brokers for the exam and that the state should do more to help people who don't pass.

"People I know who have been in the industry for 30 years flunked that test," Streiff told the Denver Business Journal after Thursday?s hearing.

Streiff, who teaches a mortgage broker education course at Red Rocks Community College that is designed to help people pass the exam, blamed the testing company chosen by the Division of Real Estate.

No wonder Chris is put out. She runs a society called "SMART" and some of it's members are...well...not so much, really. Do you think any of her students asked for a refund?

The education issue is really a side issue to the main story, which concerns Toll's issuance of a subpoena for bank records of a licensed mortgage broker as part of her investigation of a complaint made against the broker. The broker claims the subpoena of such records is unconstitutional and a hearing on a motion for a permanent in junction is set for later next month. Ms. Streiff is irritated that Ms. Toll is going after a licensed broker rather than an unlicensed one. I'm not sure what that has to do with the validity of Ms. Toll's action, but for some reason it irks the living snot out of Ms. Streiff. In fact, she accuses Ms. Toll of "terrorizing" the industry. I can't see the public being overly concerned with that problem, but I don't live in Colorado anymore, so perhaps I'm wrong.

I'm certain about one thing, however: there must be some consumers who wish the federal banking agencies acted with the aggressiveness of Erin Toll when they file complaints concerning a supervised bank or thrift.

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