Pawlenty proposes legislation to Strengthen mortgage regulation in Minnesota
- Mortgage originator licensee to be a Minnesota corporation or other business entity and meet minimum net worth or bond requirements.
- Mortgage fraud would become a specific crime in M
innesota law.
- Authorize the Department of Commerce to periodically examine mortgage companies
- Loan officers would be required to take 16 hours of educational training.
"The new proposals support the Guidelines on Nontraditional Mortgage Products that were sent to all licensed mortgage originators by the Minnesota Department of Commerce in December of 2006. The guidelines encourage lenders to make more meaningful disclosures and more careful underwriting to protect consumers from mortgage products they cannot afford."
I am not sure about the guidelines that "encourage" lenders to protect consumers from mortgage products they can not afford. – – what exactly does encourage mean?
Currently the mortgage industry is not very closely regulated. Just about anyone can get a mortgage brokers license. It doesn’t cost much or take long. Some of the standards in the proposed legislation are the same that are currently applied to the real estate and insurance industries.
**** Read More update from the Minnesota Association of Realtors **********
