I am a member of the National Association of Mortgage Professionals, and received this email in my inbox this morning. The NAMB President wrote a letter to President Obama regarding Obama’s use of singling out mortgage brokers when discussing financial reform laws. It’s a good letter that points out some of the differences between mortgage brokers/bankers and retail lenders (i.e., the person that works for a large bank, such as Wells Fargo or BofA). I have always strongly believed that any person working with you on your mortgage loan should be licensed and should have to meet educational requirements. The NAMB President points out some other items as well, so I would like to share this letter with you for your knowledge.
December 12, 2011
Mr. Barack Obama President of the United States 1600 Pennsylvania Avenue Washington, DC 10024Dear Mr. President,
In your statement last week concerning financial reform, you stated “And a key component of that was making sure that we have a watchdog in place who can police what mortgage brokers and payday lenders and other non-bank financial entities are able to do when it comes to consumers.” I am a little confused. You have singled out Mortgage Brokers twice now in your comments.
NAMB-The Association of Mortgage Professionals has been around since 1973 which includes over 100,000 LICENSED mortgage brokers/originators in America. Some basic facts for you to consider in making your statements are: NAMB supported the SAFE Act and even helped craft the bill. We serve the urban and rural areas of America and make it possible for these people to have the same advantage of mortgages as those living in the city sectors. We have never created, approved, or closed a loan. The Georgetown University study stated that Mortgage Brokers saved borrowers thousands of dollars when it came to their mortgage needs. And the obvious differences on using a broker for your mortgage is that Mortgage Brokers are licensed by their state through the NMLS system, take continuing education, take a national and state test to be able to be licensed, have a criminal background check with fingerprints, and have their credit checked. Mortgage Originators that work for a depository bank are only registered with the NMLS. And a lot of those that work for these banks failed to pass some of these items, tests, background checks, etc., and that really sets Mortgage Brokers apart from those depository institutions.
There are thousands of mortgage brokers in America that have never participated in sub-prime loans or have used any of the exotic products that Wall Street or the Mega Banks created. And most of the companies that did these loans were not mortgage brokers. You consistently use the term Mortgage Broker to relay information having to do with the Housing industry and that is not fair. Let me give you an example. When a drug creates a problem in the medical industry, the FDA goes and contacts the maker of the drug and deals with the company. They don’t go to Walgreens or CVS and shut them down and make them the scapegoat for selling the drug. The same is true with the Mortgage business. We only sell what is available from the banks and wholesale lenders. We have never developed or created any of these products. We do not underwrite them or approve them. Yet it seems that every time something negative comes out about the mortgage industry, it is a Mortgage Broker that is the scapegoat.
Members of the NAMB are small businesses employing on the average of 3-6 employees. These employees make on the average $22,000 – $35,000 per year, some smaller. You need to understand that each mortgage loan originator is in effect an entrepreneur. We work very hard to help our customers to fulfill their dreams of home ownership. Each member of NAMB agrees to abide by a Code of Ethics and to adhere to the Professional Standards and Best Lending Practices. This adherence to these standards assures consumers that the member is acting professionally in the performance of their duties. These guidelines go beyond legal requirements and are designed to emphasize the adherence to principles that consumers should expect when choosing a mortgage broker.
In conclusion, I am not stating that there should not be someone that oversees the entire mortgage origination channel, but maybe it should be more of a level playing field. It would be easier for all of America to be able to deal with apples versus apples and compare the same things when going to any mortgage operation, be it a Broker Originator, Banker Originator, or Depository Originator. Our Association would be pleased to sit with staff to educate them in the differences in the mortgage origination business, be it the what, who, where and how a mortgage broker operates and who they serve.
I look forward to your response.
Sincerely,
Donald J. Frommeyer, CRMS
NAMB President
