As always, the government is trying to modernize the laws that we abide by. There are currently three bills that I’m watching proposed here in Iowa.
House Bill 551 / Senate Bill 3107 : Agency Duty for Mortgage Brokers
In summary, this is a bill that proposes Mortgage Brokers treat a relationship as an ‘agency relationship’. It continues to describe that we would be required to act in the customers best interest (wow, that’s not expected already?), not receive/give/charge any undisclosed fees to a borrower. The list goes on, but this seems like a bill that would better define the obligations a mortgage broker has to their ‘customer’ (we aren’t supposed to refer to them as clients.. because apparently that’s moving past 3rd base in our business).
Progress thus far: The Iowa Association of Mortgage Brokers (IAAMB), who are opposed to this bill, have appeared before a sub-committee to voice the association’s opinions.
My opinion: I think this would be a better bill if it included ALL ORIGINATORS. Too often mortgage brokers are put on a different playing field than mortgage bankers and others. I’ve made it my business practice to treat my customers just like an attorney would represent a client (without the lack of personality). It’s a good bill, but it needs to be more comprehensive. Quit pointing fingers at mortgage brokers everyone! Target the bad actors and get them out of the industry, it’ll be a better world without them.
House Bill 552 : Increase Dollar Amount for Consumer Credit Code
In summary (my understanding), this is a bill that proposes an increase from the current credit limit of $25,000 to $75,000. This is in relation to consumer credit sales, amounts financed or leased or amount payable under a consumer rental purchase agreement. It appears as if this legislation is going create some restrictions on credit for consumers (this is why IAAMB is against the bill).
Progress thus far: No hearings to date.
My opinion: I don’t even completely understand what this bill effects based on its current form. Clarification would be a fantastic start. From there, I think that this sounds like it’s going to effect low income areas/borrowers.. and that’s no good. More to come on this as I understand what the heck it is they are talking about… comments are open – so please add if you know more.
House Bill 554 : Licensing and Regulation of Escrow Companies
In summary, this is a bill that would make it illegal to have an escrow company in the same office as a broker business. Pretty self explanatory really – if you have a mortgage brokerage business, you cannot have an escrow office in the same office.
Progress thus far: There has been one sup-committee hearing to date.
My opinion: I’m not extremely for or against this legislation. I’m sure It’s targeted at a couple specific businesses around Des Moines. Those businesses that it would affect are well run companies (in my opinion). So I’m fine with it. I think those companies whom have escrow offices in or near their office (often owned by the same owner), are attempting to streamline their business and have a larger piece of the pie during the process. Four Legacies Mortgage isn’t planning on doing this in the future. I find more value in connecting with other professionals and continue doing what we’re extremely good at, and that is mortgages.
There will inevitably be more to come on these topics in the future. With the mess we’ve seen in some sectors of the mortgage market, I’m sure our attorney general will find a way to protect consumers further with new legislation. In the meantime, don’t shoot the messenger. Brokers didn’t get the country into this ‘mess’, it was a group effort of greed and under-estimation of the long term effects of the lending practices. Please – DON’T get me started.
