Banking Law

Last year, we detailed Colorado's "crisis" with respect to the "deactiviation" of mortgage brokerage licenses in that state because so many of the brokers couldn't pass a basic skills test. Colorado wasn't alone, inasmuch as previous posts over the last few years have related similar problems in Texas and Washington.

We learned yesterday that Florida is having its own mortgage broker fallout problem, but in the Sunshine State's case it's not due to dummies failing a test but because they haven't bothered to apply for a license under the new stringent licensing requirements mandated by the S.A.F.E. Act.

Less than 25 percent of mortgage industry professionals in Florida have submitted an application to the state to obtain licensing under new guidelines that will be implemented on January 1. With less than a month to go before more stringent requirements take effect, the state is now concerned that mortgage brokers throughout the state could find themselves ineligible to work.

[...]

The state said only 14 percent of the licensed mortgage companies and 23 percent of the licensed mortgage company branches in the state have submitted applications.

Those who submit applications after December 31 could be forced to wait up to three months to have new applications approved.

Maybe it's just me, but there appears to be a severe morale problem in the mortgage brokerage business. Perhaps that's due to the fact that since the subprime meltdown in 2007 and the general economic collapse in the fall of 2008, the mortgage business has...how shall we put it delicately..."sucked." We don't mean "sucked" in the sense that you might inhale somewhat more  vigorously after a brisk 10-minute walk to Starbucks. No, we mean "sucked" with force sufficient to draw a golf ball through six feet of garden hose.

The reason that mortgage brokers aren't re-taking educational tests or applying for a new license might just be that many of them have found other useful employment, such as asking me whether I'd like "fries with that" or "a blueberry scone to go with that latte."  Perhaps I'm wrong, but I think these phenomena are due more to mortgage brokers having left the mortgage business in droves so they can earn a steady income than they are to some total ignorance of regulatory requirements or space aliens shooting their heads full of pellets that cause a sudden onset of Asperger's syndrome. If it turns out that, all of a sudden, the mortgage lending needs of Joe and Jane Sixpack are not being adequately served, we can always find some folks offshore, like the very polite and efficient customer service representative I spoke to yesterday on a technology problem and who identified himself, without cracking up once, as "Brandon" (but who definitely sounded more like "Mujibar") to fill in the gaps until our home-grown mortgage brokers get their collective act together again.