Industry NewsMortgage

States tighten up on real estate loan brokers

Proposed laws regulate mortgage professionals

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Impelled by concerns about issues including mortgage fraud and predatory lending, a number of states are introducing legislation to create or expand regulation for mortgage brokers. Colorado and Alaska legislators are considering proposed laws regulating mortgage brokers, and a bill expanding regulation to loan originators as well as brokers was signed into law last Thursday in Washington. Additionally, last July a new law licensing Wyoming mortgage brokers went into effect. After the Wyoming law went into effect, Colorado and Alaska were the only two states left without licensing laws for mortgage brokers. Democratic Rep. Valentin "Val" J. Vigil of Colorado said "a huge increase" in mortgage fraud was one of the factors that motivated him to introduce a bill regulating mortgage brokers. The Federal Bureau of Investigation has said there is a "growing epidemic of mortgage fraud" in the United States, with reported losses from such fraud soaring to more than $1 billion in the fiscal ye...