Mortgage Originator Licensing in Massachusetts
In the past several weeks I have met with several mortgage loan originators to discuss the next thing in the mortgage industry - mortgage financial planning. Whether born of the mortgage market meltdown, the rise of reverse mortgages or simply all the free time that mortgage loan originators are finding themselves with, there is a new phenomenon of the lowly mortgage salesperson becoming a quasi professional giving potential borrowers all sorts of advice about mortgage loan products.
There are weekend seminars that give you "certification", online courses to become a "diplomate" (I did not make that one up), and any number of in-house training programs. In an ever consolidating industry so narrowly focused on mortgage rates, The goal is for mortgage originators to distinguish themselves on the basis of service and added value.
Being a specialist or planner means using the mortgage as an integrated component of the financial plan rather than just a mere loan. Timing payments, tracking benchmark rates, coordinating debt with equity investments, putting estate and tax planning in the big picture and elevating the message that a mortgage is as important a financial services product as life insurance, mutual funds and bonds.
When I refer clients for mortgage services I only look for those loan orginators that are the real pros - like most businesses there are far too many "posers" that merely take orders and smile. You can find links on the Law for Life blog to some of the lenders that we work with regularly and know that they can deliver what they promise.
Kevin Clark from Clark Mortgage Consulting (he's part of the PHH Mortgage empire) is one those originators that "gets it" when it comes to mortgage planning. Kevin has obtained the CMPS (Certified Mortgage Planning Specialist) designation which seems to be the most complete review and training for full service mortgage originators (www.cmpsinstitute.org). Kevin is a thorough and competent professional that fits the right product to each borrower.
Likewise, in the reverse mortgage world, Ed Barrett of Your Home for Life (www.yourhomeforlife.com) is the best reverse mortgage originator in Massachusetts. He is active in the National Reverse Mortgage Lenders Association's (www.nrmla.org) professional development efforts and puts more effort than anyone into perfecting his knowledge of reverse mortgages.
So, all this talk of professional accreditation and education makes the 800lb gorrilla in the corner speak up a little. What 800lb gorrilla? Licensing, of course. Currently Massachusetts licenses mortgage lenders and brokers as sort of "junior banks" with a fair amount of oversight and restrictions, but there are no licenses for individual loan originators. None. Zilch. Nada. Want to be a loan originator? All you need is a friend in the business with a license and 3 days to wait for VistaPrint to send your box of cards.
Like any maturing industry mortgage origination in Massachusetts has come to its time of reckoning. Frankly, with loan originators leaving the industry in droves because of low mortgage loan volumes, those mortgage originators staying in the business are the "survivors" and really those that should embrace licensing as a way to protect their stock in trade. Licensing leads to regulatory oversight, continuing education and professional recognition for mortgage originators.
On the con side, the Commonwealth of Massachusetts has done a poor job overseeing real estate salespersons and real estate brokers in Massachusetts. It is quite difficult for a consumer to get heard in their complaint and few real estate agents are subjected to any meaningful discipline in any given year. You can read more about my position on this issue in my Boston Magazine interview from a few years back here: http://www.bostonmagazine.com/home/articles/double_agents/
I favor mortgage originator licensing in Massachusetts if it is acheived by communication with industry leaders, a committment to oversight by regulators and includes both a strong consumer participation process and mandatory continuing education (including business ethics for mortgage originators).
