State lawmakers push to ease mortgage industry requirements

by MPA19 Dec 2014
Lawmakers in North Carolina are attempting to roll back some of the requirements for mortgage professionals in the state. The changes would include reducing the amounts mortgage lenders and brokers are required to be bonded and easing auditing requirements.

The state’s legislators vote unanimously Friday to recommend the changes, which are expected to be taken up when the state’s General Assembly convenes in January, according to the Associated Press. They would apply to mortgage lenders that don’t take deposits, as opposed to banks.

Proponents claim the changes will cut costs for the mortgage industry, while critics say they would dilute protections for borrowers.

Rep. John Bell (R-Wayne) told the Charlotte Observer the proposed changes would provide relief to small mortgage firms he said are struggling to grow because of the costs to comply with existing state laws.

However, consumer advocates are concerned that loosening the rules could make it easier for bad actors to operate in North Carolina’s mortgage industry. “Mortgage bankers and mortgage brokers were a big reason why we got into the financial crisis,” Chris Kukla, senior vice president for the North Carolina told the media outlet. “The last thing we want to do now is relax standards and let unqualified people into the business.”

The changes come at a time when U.S. mortgage industry regulations are again becoming a hot topic politically.

President Barack Obama recently signed into law a $1.1 trillion spending bill that included a provision which rolled back part of the Dodd-Frank Act. The provision would allow FDIC-insured banks to conduct risky derivatives trading that Dodd-Frank had barred in the wake of the financial meltdown.


  • by SanDiegoLoanOfficer | 12/19/2014 4:51:19 PM

    Compliance costs have gone through the roof and are restrictive and are passed down to the borrower/consumer. Its time for the pendulum to swing back to a balanced middle for the greater good of all.

    With the HPML rules now allowing APOR's over 1.5%, and UFMIPs being part of the calculation, my poor FHA clients here in San Diego CA can no longer increase their already rock bottom rate a little higher to use the credit to help offset their closing costs. It's terrble.

    We all need to tell our elected officials about these issues and garner support for change, just like these folks did in Carolina!

  • by SanDiegoLoanOfficer | 12/19/2014 4:52:25 PM

    *not / not now...

  • by Marc Savitt | 12/20/2014 7:37:55 AM

    Compliance costs for small business bankers and brokers make it difficult to expand and hire. In many cases these costs force small business out of business.

    In my opinion, Chris Kukla should understand an issue before commenting on it. Instead, we see the old standby talking points, which had no merit years ago and to this day.

    Non-Bank mortgage brokers, mortgage bankers and mortgage originators, are the most heavily regulated sector of the mortgage financing industry. Relaxing costs will not jeopardize the public, nor allow bad actors to gain entry into the industry. These licensed professionals will still go through background investigations, submit to tests that judge their knowledge, be fingerprinted,have their own credit reviewed and take continuing education classes every year.

    Chris,I wonder if you understand brokers did not cause the housing/mortgage crisis. You should look to those who developed the harmful mortgage programs, set the guidelines and most importantly APPROVED the mortgages. Brokers don't underwrite and approve mortgages.

    I applaud NC for standing up for small business.


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