New LO Licensing Req: Minimum Credit Scores?

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Agent_Mike

987 Posts

Posted - 08/06/2008 : 2:31:37 PM

Correct me if I'm wrong, but the new law seems to stipulate that licensing would now require that loan agents authorize the government to run their credit and prove "demonstrated financial responsibility, character." Does this mean there will be a minimum FICO requirement to be a Loan Agent??? LOL! There goes the half of industry for sure if that's the case.

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S.A.F.E. Mortgage Licensing Act of 2008 - S.2595 in Senate

SEC. 5. STATE LICENSE AND REGISTRATION APPLICATION AND ISSUANCE.

(2) personal history and experience, including authorization for the System to obtain--

(A) an independent credit report obtained from a consumer reporting agency described in section 603(p) of the Fair Credit Reporting Act; and

...

(3) The applicant has demonstrated financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that the loan originator will operate honestly, fairly, and efficiently within the purposes of this Act.

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source:
http://thomas.loc.gov/cgi-bin/query/F?c110:1:./temp/~c11069uask:e2556:

Managing Prime

2958 Posts

Posted - 08/06/2008 : 2:33:08 PM

It's a good thing.

assassin17

7704 Posts

Posted - 08/06/2008 : 2:34:26 PM

Works for me.

Agent_Mike

987 Posts

Posted - 08/06/2008 : 2:35:29 PM

Just got to wait and see if it goes through.

Sure would be interesting. I'd still be around.

isitfree

1285 Posts

Posted - 08/06/2008 : 2:36:50 PM

I'm gonna take a guess and say that multiple foreclosures will be frowned upon.

rtrefflich

5176 Posts

Posted - 08/06/2008 : 2:37:46 PM

Yes and no, what if you had a huge shop with leases and all and the downturn came, your credit is shot now and you can't make any money.

In the securities industry you just have to be able to explain the challenges and its not a problem.

Agent_Mike

987 Posts

Posted - 08/06/2008 : 2:48:27 PM

quote:
Originally posted by rtrefflich

Yes and no, what if you had a huge shop with leases and all and the downturn came, your credit is shot now and you can't make any money.

In the securities industry you just have to be able to explain the challenges and its not a problem.

Yes it does seem a bit catch-22'ish: how can you make the money to pay the bills to have a responsible credit when you can't have the license to make the money to begin with?

Also, I'm not sure if they'll make any distinctions in their stringency for 1st time applicants versus re-registering applicants. Obviously, those that are in the business during the down turn should be given more leeway as these things happen - but if you're a first time applicant with a messed up history, why should you have the opportunity to give advice and consultation to others about their own credit history when you couldn't even manage your own?

It's kind of like hiring a fat guy to be your personal trainer.

isitfree

1285 Posts

Posted - 08/06/2008 : 2:51:51 PM

Is it anything like a driving instructor with multiple DUI's?

MortgageBoarder

6473 Posts

Posted - 08/06/2008 : 2:56:51 PM

I imagine it will be treated the same way as the Securities industry. I already had to deal with this when joining CW. I had one credit card at 18 and one auto loan, got rid of both of them within 6 months and have not had any credit since (6 years).

CW didn't like this and I had to write an LOE basically saying I have lived off of cash since I was 18 and have not had a need for credit (oh, the good ole days). They were fine with that and I made it in. But obviously, I know how important maintaining good credit is so I should probably get a small credit card or something ASAP, especially if I plan on buying a home in the next year or two.

I have just been a believer in if I can't pay for it out of pocket, I don't need it. But I do need credit to buy a house, and potentially, to save my career!! lol

quote:
Originally posted by rtrefflich

Yes and no, what if you had a huge shop with leases and all and the downturn came, your credit is shot now and you can't make any money.

In the securities industry you just have to be able to explain the challenges and its not a problem.

eh6794

977 Posts

Posted - 08/06/2008 : 3:30:53 PM

I bet current licensees get grandfathered in....

rtrefflich

5176 Posts

Posted - 08/06/2008 : 3:42:22 PM

One of the challenges would be how they would rate it. My credit is by no means bad, I have a ton of debt (mostly mortgages) and max out and pay off a few credit cards every one or two months to do projects. I have tried getting some corporate credit but w/out paying some outrageous fee (I would pay it out of the line, no problem) they want upfront it makes it even harder. Depending upon what day it is I am from a 600 to a 660. No late payments, a lot of inquiries (mostly business) but if they were going to make me turn in my license because of this I would find the best attorney and sue.

eh6794

977 Posts

Posted - 08/06/2008 : 3:43:54 PM

Youll be fine

RefiGuy112

274 Posts

Posted - 08/06/2008 : 4:30:53 PM

Life Insurance brokers have been doing this such as New York Life, Met Life, Ect.. The DRE should follow their screening process.

benjamin

6867 Posts

Posted - 08/06/2008 : 5:17:39 PM

Do as I say, not as I do. 15 years out the window. If they go off of scores and credit card history, see ya. I now am feeling a bit of remorse that I did not jack up margin, did not do option arms, did not go to closing and throw in a few more points or raise rate.

Those of you that did will still be around to do it again to those poor suckers that trusted you.

hcf_ae

92 Posts

Posted - 08/06/2008 : 5:20:25 PM

I don't think my credit should be any of the governments business. At all ever! Criminal records are enough to deter the wrong kind of character.

johnnyboy38109

4341 Posts

Posted - 08/06/2008 : 5:34:54 PM

quote:
Originally posted by hcf_ae

I don't think my credit should be any of the governments business. At all ever! Criminal records are enough to deter the wrong kind of character.

I support more regs as I've said before, but to me it is a bit contradictory......here we have $300 billion set aside as a form of a socialized bail-out system for banks, GSEs and foolish borrowers, but we're gonna go after mortgage folk both barrels and expect they wont be affected by the implosion of the industry? They'd expect the industry's loan officers to just buzz thru the meltdown without a bruise, what with 256+ on Lenderimplode, Fannie and Freddie being basically useless, and every nonconforming program taken away.........? Thst wouldnt be fair, seems to me, to the folk who've weathered the storm and came thru...............bruised a little, but came through. I'll be fine but it will put a lot of the folk I know out, forever. Even those far more succesful than little ole me.

I cant imagine this will pass in its current form, it may be applied to newbies, but if its applied to us as a whole, the next problem govies will have will be the unemployment rate.

Agent_Mike

987 Posts

Posted - 08/06/2008 : 5:43:50 PM

quote:
Originally posted by hcf_ae

I don't think my credit should be any of the governments business. At all ever! Criminal records are enough to deter the wrong kind of character.

Well that's arguable.

Given that much of our job is involved in the finance sector - having to examine and consult people into various situations based on their credit, it makes sense to hypothesize that a consultant with a better credit history (not necessarily score) might be more fit to satisfy their fiduciary duties (if you're in CA, if not, then just your duty) than someone who has had a blemished history.

Although I can see exceptions be made for existing licensees who can prove their experience and explain any spots on their credit history, I cannot see there being such leniency for first time applicants with messed up history.

gdjoe20

406 Posts

Posted - 08/06/2008 : 5:45:16 PM

Can i use my credit from early 07? was a 720, now mid 500's. this will have me worried. lots of late payments, a few small medical/cell phone collections. I am worried

VVance

6509 Posts

Posted - 08/06/2008 : 5:48:48 PM

As to credit, scores will be used although unconfirmed at this point

Minimum credit score (brokers) 760

Minimum credit score (Retail) 500

lshaull

100 Posts

Posted - 08/06/2008 : 5:49:21 PM

Has this actually been signed into law?

gsgroupinc

2068 Posts

Posted - 08/06/2008 : 5:54:02 PM

the politicians who write these should have to get credit reports , finger printed and pre screened as well.

Agent_Mike

987 Posts

Posted - 08/06/2008 : 5:57:38 PM

quote:
Originally posted by VVance

As to credit, scores will be used although unconfirmed at this point

Minimum credit score (brokers) 760

Minimum credit score (Retail) 500

lol, I just realized you're joking.

Agent_Mike

987 Posts

Posted - 08/06/2008 : 6:04:53 PM

quote:
Originally posted by lshaull

Has this actually been signed into law?

No it has not my friend.

It is in the legislation at this point and it still has some ways to go. Even at that - the President can still veto it out.

But the premise is pretty shock and awe for many people in our industry. So I thought I'd bring it up. Even if this doesn't pass, with a heavily Democratic House, more like it might come in the future and we should all get prepared whichever ways we can.

Agent_Mike

987 Posts

Posted - 08/06/2008 : 6:05:48 PM

quote:
Originally posted by gsgroupinc

the politicians who write these should have to get credit reports , finger printed and pre screened as well.

gsgroupinc

2068 Posts

Posted - 08/06/2008 : 6:08:45 PM

quote:
Originally posted by Agent_Mike

[quote]Originally posted by gsgroupinc

the politicians who write these should have to get credit reports , finger printed and pre screened as well.

Amen on the finger print and pre-screen portion.

I don't agree on credit report though. Their job descriptions as legislatures don't require them to engage in one-on-one consultation in someone's finance directly.
[/quote

Well if they have bad credit they would be a higher risk for corruption. (kick backs and bribes)

johnnyboy38109

4341 Posts

Posted - 08/06/2008 : 6:13:09 PM

quote:
Originally posted by VVance

As to credit, scores will be used although unconfirmed at this point

Minimum credit score (brokers) 760

Minimum credit score (Retail) 500

This is patently false. I've read the entirety of this and its not listed anywhere.

Agent_Mike

987 Posts

Posted - 08/06/2008 : 6:16:51 PM

lol steven, good point and I hear ya.

But LO's are the new black sheep and everyone is going to love to pick on us anyway they can.

Of all the different ways they've devised to make our lives more difficult (taking away YSP, etc), this one seems to also make sense in safeguarding the clients to some degree.

I'm sure this needs more refinement and specificity, but the idea proposed is a good utilitarian proposal.

Agent_Mike

987 Posts

Posted - 08/06/2008 : 6:19:04 PM

quote:
Originally posted by darkstar

I just read the whole thing, I didn't see any mention of currently licensed LOs, it seems, if passed, EVERYONE will have to get the education, background checks and jump thru all the hoops...The good part would be a national database for consumers to look up LOs and see if they have any violations or such...

This is probably the reason it's not passed yet. It needs much more refinement and I'm sure the original proposal is a raw (and itchy) one.

They'd better come back with some make-sense amendments in consideration of the currently licensed LO, as well as those who has to be re-licensed, and the affects that this market has had on those that are in this industry.

dealmakerz

554 Posts

Posted - 08/06/2008 : 6:20:47 PM

quote:
Originally posted by johnnyboy38109

quote:
Originally posted by VVance

As to credit, scores will be used although unconfirmed at this point

Minimum credit score (brokers) 760

Minimum credit score (Retail) 500

This is patently false. I've read the entirety of this and its not listed anywhere.

Let me guess, when someone tells a joke in your office you are the only one that doesn't get it.

johnnyboy38109

4341 Posts

Posted - 08/06/2008 : 6:24:45 PM

quote:
Originally posted by dealmakerz

quote:
Originally posted by johnnyboy38109

quote:
Originally posted by VVance

As to credit, scores will be used although unconfirmed at this point

Minimum credit score (brokers) 760

Minimum credit score (Retail) 500

This is patently false. I've read the entirety of this and its not listed anywhere.

Let me guess, when someone tells a joke in your office you are the only one that doesn't get it.

Maybe its just because I dont

a) see the humour

or

b) dont like the hysteria it feeds

If he meant it as humour, its too dry.

VVance

6509 Posts

Posted - 08/06/2008 : 6:33:26 PM

quote:
Originally posted by johnnyboy38109

quote:
Originally posted by dealmakerz

quote:
Originally posted by johnnyboy38109

quote:
Originally posted by VVance

As to credit, scores will be used although unconfirmed at this point

Minimum credit score (brokers) 760

Minimum credit score (Retail) 500

This is patently false. I've read the entirety of this and its not listed anywhere.

Let me guess, when someone tells a joke in your office you are the only one that doesn't get it.

Maybe its just because I dont

a) see the humour

or

b) dont like the hysteria it feeds

If he meant it as humour, its too dry.

mykal5

6130 Posts

Posted - 08/06/2008 : 6:52:03 PM

quote:
Originally posted by darkstar

>>> too dry.

Too dry?...I'll show you too dry, we have to drive 17 miles to get to a wet county and get a beer, now that's DRY!

And here I thought getting a drink in Utah was tougher than it should be. I haven't had a beer in a few months (and I miss it) but I would go nuts if I couldn't get it within 15 minutes of wanting it.

fsboguy

3869 Posts

Posted - 08/06/2008 : 7:00:01 PM

quote:
Originally posted by mykal5

quote:
Originally posted by darkstar

>>> too dry.

Too dry?...I'll show you too dry, we have to drive 17 miles to get to a wet county and get a beer, now that's DRY!

And here I thought getting a drink in Utah was tougher than it should be. I haven't had a beer in a few months (and I miss it) but I would go nuts if I couldn't get it within 15 minutes of wanting it.

Never had a problem getting a beer here.

raymondb

5083 Posts

Posted - 08/06/2008 : 7:11:17 PM

Of all the tourists we see in Vegas, Utah residents are definitely the wildest when they get out here. now I know why.

quote:
Originally posted by mykal5

quote:
Originally posted by darkstar

>>> too dry.

Too dry?...I'll show you too dry, we have to drive 17 miles to get to a wet county and get a beer, now that's DRY!

And here I thought getting a drink in Utah was tougher than it should be. I haven't had a beer in a few months (and I miss it) but I would go nuts if I couldn't get it within 15 minutes of wanting it.

velecico

5250 Posts

Posted - 08/06/2008 : 7:16:58 PM

I heard lead providers must consent to credit score test and mod/audit detectives an FBI cavity search

dturner

21 Posts

Posted - 08/06/2008 : 8:07:44 PM

I wonder how this would play out for broker or banker status?

mykal5

6130 Posts

Posted - 08/06/2008 : 8:44:04 PM

Let me clarify, beer is quite easy to get here, unless of course you want a premium beer. I tend to avoid grocery store beer which has an alcohol content of 3.2%. The better beers have to be purchase in a Liqour store and while still easy to get it is not as easy as running down to the grocery store. Just a small pain. Fortunately I don't drink much so my bar stays stocked.

SolarMTG

473 Posts

Posted - 08/06/2008 : 8:57:39 PM

Dude, please provide a link that shows that this is in the Senate. From what I can tell, this was introduced in February 2008 in the Senate has not done anything since. It seems to have died from what I can see.

Agent_Mike

987 Posts

Posted - 08/06/2008 : 9:52:51 PM

quote:
Originally posted by SolarMTG

Dude, please provide a link that shows that this is in the Senate. From what I can tell, this was introduced in February 2008 in the Senate has not done anything since. It seems to have died from what I can see.

I can't copy paste link - it's formatted weird. But here are the instructions.

Go to: http://www.senate.gov/

In the top right hand "search" box type in "Mortgage Licensing Act of 2008"

The first result shows you it was in active debate in April.

The 4th result shows it being partially approved in July.

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