40% of Indiana’s mortgage brokers have lost their licenses because they did not comply with a new law aimed at “raising the standards” of the mortgage lending industry. The law requires mortgage brokerages to “name a principal broker with at least three years experience who has passed a state exam and will oversee his company’s business affairs,” says BusinessWeek. Sounds reasonable, doesn’t it?
The Indiana Association of Mortgage Brokers worked with Rokita’s office and lawmakers in drafting the new law, said the group’s president, Mike Monaco of Merrillville.
“Make no mistake about it, we had one of the easiest entrance barriers in the country,” Monaco said. He said many of the brokers who have lost their licenses likely already had left the business because of the housing industry downturn.
The low standards likely were among the factors leading to Indiana consistently having one of the 10 highest foreclosure rates in the nation, Monaco said.
When you add in the 143 brokerages who voluntarily gave up their licenses, the total number of mortgage brokerages in Indiana has shrunk by half since July 1st.
If you’re interested in seeing a list of all the brokerages whose licenses have been revoked, you can click here (PDF).