Buono Moves To License Mortgage Solicitors

TRENTON – In a bid to crack down on rising abuses by loan officers in the mortgage marketing field, Senators Barbara Buono today unveiled a proposal to subject the State’s 42,000-plus mortgage solicitors to mandatory training, criminal background checks and licensing exams.

“Right now, there’s no way to keep unscrupulous loan officers from luring consumers into high risk mortgage loans they can’t possibly afford,” said Senator Buono, D-Middlesex.

Senator Raymond J. Lesniak, D-Union, said he will be a co-prime sponsor of the measure to be introduced on Thursday.

Solicitors, who normally work for licensed brokers or other licensed lenders, can get quick access to personal financial information because they are usually the first contacts for mortgage applicants. Current law allows them to go into business simply by paying a $100 registration fee with no requirements for education, testing or criminal background checks.

“We need to patch up this crack in the system by requiring licensing standards, criminal background checks and training to help purge the bad actors from the mortgage business,” Senator Buono said.

“All too often, people about to make the biggest investment of their lives – the purchase of a home – fall prey to scam artists who can steal identities, mislead uneducated investors and then just disappear,” Senator Buono said.

Under the proposal, the Department of Banking and Insurance would be charged with establishing licensing standards for mortgage solicitors that would include a minimum of 24 hours of classroom instruction in mortgage and predatory lending laws, underwriting, secondary markets, financing and ethics.

In addition, license applicants, including the current list of registered mortgage solicitors, would have to successfully pass a criminal background check before qualifying to take the State administered examination for a two-year license.

“It’s a legitimate responsibility of the State to pluck the bad apples from a business that, by nature, gets very close to families and the money they’ve worked for,” Senator Buono said.

Senator Buono pointed out that mortgage solicitors, also known as loan officers, essentially perform the same functions as the State’s estimated 1,500 licensed mortgage brokers by bringing people who need loans in contact with those who have money to lend.

“The huge difference, however, is that – unlike loan officers – licensed mortgage brokers are personally liable for fraud and can lose their licenses for wrongdoing during the life of a loan,” Senator Buono said. “This legislation makes it clear that we want accountability for loan officers as a way to guard against consumer fraud.”