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Things are definitely changing in the mortgage industry.  There are new regulations being put into place, even as I write this, in the hopes of protecting homeowners from unscrupulous practices.  There are still many questions to be answered about how everything will impact the industry.

Part of the overall plan is to create a new and improved mortgage loan officer. These new loan officers will be lean and mean and in it for the long haul. In other words, it will now be a profession consisting of people that want to be long-term professionals not just looking for a bundle of cash only to hit the road again. The government and mortgage industry have collaborated on a new project in hopes of establishing better mortgage loan officers with stronger backbones and more transparency. The program should be running smoothly in 2011 and become the new norm. Here are a few of the details they have been fine-tuning:

1. All mortgage loan officers need to be registered and licensed with their state regulating department. In order to be accepted, the mortgage loan officer needs to pass certain standards such as no criminal charges of fraud and personal financial stability.

2. A loan officer needs to have 20 hours of industry related education and pass a difficult test before then can actively work in the industry. They also need to take continuing education courses on federal and state specific laws and guidelines.

3. All mortgage loan officers need to be bonded (insured) in case of any personal wrongdoing in order to protect the customer. 

The compensation for all mortgage loan officers will be capped in April, 2011. These regulations will become the new industry standard of compensation.

In essence, these restrictions are trying to create a better loan officer, one that actually took the steps to join the profession and continues to maintain their status. There are now thousands of dollars in fees imposed on the individual for licensing, insurance and education. This makes a person decide if they really want to enter the industry as a serious professional and not just on a whim. The reasoning behind having the compensation capped across the board is to control greed but not to force the best professionals to leave the industry altogether. We can only hope for proper thinking to prevail here.

Posted by:  Lynda Fleming, Integrity Mortgage Customer Service Rep.