Background checks

The U.S. mortgage crisis is touching just about every area of society, both here and overseas. You can bet that legislators at all levels are lining up to hold hearings and propose legislation. After all, that will often get them TV coverage which seems to be the object of so many political activities.

In New Jersey the mortgage crisis has spawned a call for background checks, this time on mortgage brokers. The Press of Atlantic City reports that there are bills working their way through the New Jersey Assembly and Senate that would raise the requirements bar for people who want to become mortgage brokers.

Currently in New Jersey you don’t need a license to solicit mortgage business as long as you’re working for a licensed mortgage company. The proposed legislation would change that by requiring the mortgage solicitors obtain individual licenses.

The licensing process would require taking an examination, undergoing a criminal background check, and completing instruction in “the legal, ethical and business aspects of the field.” I’m not impressed.

Legislators would do us all much more good if they would delve into the entire process of securitizing mortgage loans. Securitization removes any incentive for the loan originator to be concerned about […]