Know your lender

The Arizona Republic, reports that the Department of Financial Institutions, which oversees state banks, credit unions, escrow firms and mortgage brokers and bankers, is backing a new bill-- House Bill 2320-- which if passed will require the licensing of most of Arizona's mortgage loan officers and originators and bring more accountability to the industry. It is estimated that there are 18,000 unlicensed people taking mortgage applications, negotiating rates and getting loan commissions statewide. If the legislation becomes law, mortgage officers and originators will have to take a class on the business, pass a test and pay a fee. Complaints have soared from Arizona consumers getting mortgages with hidden fees and prepayment penalties and higher rates than promised. Foreclosures are climbing because many of those homeowners can't afford their mortgage payments. More than 30 states have laws licensing mortgage officers. "So many sales contracts fall out of escrow in the Valley because of incompetent mortgage people," said Mary Gomez, a West Valley real estate agent with Realty Executives. "Real estate agents have to have licenses. Appraisers have to have licenses. All mortgage officers should, too."