You might want to make sure here next month that your mortgage lender is legally doing business for you here in Colorado. It turns out a very interesting story was emailed to me from our corporate attorney this evening.
Nearly half of the 8,729 licensed mortgage brokers in Colorado have failed to meet new state requirements and face losing their licenses Aug. 31. “We could be looking at a complete disaster,” Erin Toll, director of the Colorado Division of Real Estate, told the Denver Business Journal.
After Colorado enacted its mortgage broker licensing law in January 2008, all licensed brokers had one year to complete 40 hours of licensing education and pass a written test. By December of 2008, nearly 6,000 brokers had not fulfilled the new requirements. To avoid a potential blow to the state’s credit markets by revoking the licenses of a significant percentage of brokers at one time, the Division of Real Estate subsequently granted a 90-day extension.
However, as of July 2009, more than 4,000 brokers still had not met the requirements to maintain licensure. According to Douglas Braden, past president of the Colorado Association of Mortgage Brokers, if those brokers are active practitioners, and half of them lose their licenses next month, it certainly will present a significant problem for the state.
“When you take that many people that potentially were well-qualified, that were doing good business for consumers, and you take those allies away from consumers, it leaves them a whole lot less choice,” Braden told the Journal. “Less choice and more restrictive guidelines don’t mean we’re going to make more loans. It means we’re going to make a lot less loans, a lot less people are going to qualify and a lot less people are going to have someone in their corner.”