|Jason Berman isn't panicking -- at least not yet -- even though it appears most of Colorado's mortgage brokers have yet to apply for the licenses they will need to operate in the state after Jan. 1.
Berman, president of the Colorado Association of Mortgage Brokers, told MortgageDaily.com he estimates that about half of the state's 8,000 brokers have been fingerprinted and gone through the background check necessary to receive a license.
"But that's a pure guess," Berman said. "It could be up to 8,000, but there really is no clue of how many brokers that could be subject to this.
"We don't know if there will be backlog," he said. "It's a little early to get concerned about it. We don't want to create a panic. We're sitting back and waiting to see what happens."
Like several states, Colorado has been licensing mortgage brokers as a consumer protection. Colorado has been plagued by a rash of mortgage fraud in recent years, and some lawmakers pushed the law to weed out unscrupulous brokers.
Berman said the Colorado Bureau of Investigation, which is running the background checks, has registered about 4,000 brokers. As long as brokers have started the process of applying, or don't wait too much longer, they should receive their license shortly after the first of the year.
The bureau is reporting that background checks are taking up to three months to complete.
Berman said some brokers will invariably wait too long and not be able to close loans after the first of the year.
"We'll have to wait to see how it goes; I don't know how many complaints we'll get," he said.
Berman said his biggest gripe about the new law is the exemptions.
Among the exemptions are employees of federally regulated lenders, such as banks and savings and loans, and brokers handling FHA loans.
"I don't like the fact there is an FHA exemption at all," Berman said. "It creates an uneven playing field."
Brokers must also pay a fee and post a $25,000 surety bond. Brokers who have lost their licenses in other states or who have been convicted of fraud or other serious crimes, such as theft, will be denied a license, Berman said.