Nearly 90 Minnesota mortgage brokers have given up their licenses so far this year, and if New Hampshire’s banking commissioner gets his way — that state will see a drop in the number of mortgage originators.
Three years ago, legislators in New Hampshire defeated a plan to license mortgage brokers.
But with fraud becoming more rampant, and a political change in the legislature, the state’s top financial regulator is now calling for a crackdown on fraud that includes licensing brokers.
“I’m going to ask the legislature to license originators,” New Hampshire Banking Commissioner Peter Hildreth told MortgageDaily.com. “In some fashion that will give us more regulation over mortgage regulators and we can keep the bad folks out of the business.”
A growing problem with fraud and foreclosures along with the change in the state legislature from Republican to Democrat has convinced Hildreth that the time is right to ask for the toughened regulations.
“The last time this came up I was neutral,” he said. “I hate to paint everyone with the same brush … but we need something with more teeth.”
In November, as the subprime market began to sour, Hildreth issued a new set of guidelines on the risks of “non traditional” mortgage loans and products.
North Carolina Banking Commissioner has suspended the license of Aapex Mortgage, a national subprime lender, after learning that the company was cited by regulators in six other states — Alabama, Georgia, Illinois, Maryland, Massachusetts and Ohio.
The company was previously fined $322,000 in North Carolina for alleged violations of mortgage laws and regulations, according to documents provided by the state.
Aapex “may not longer act as a mortgage lender or mortgage broker,” according to the five page order signed by Smith.
Regulators say Aapex’s earlier problems in North Carolina included not putting some fees into escrow accounts, letting employees who were not licensed close loans and not maintaining proper records.
In Georgia City Capital Mortgage has been issued a cease and desist order, the Georgia Department of Banking and Finance said in a statement. The Atlanta-based company “engaged in mortgage brokerage/lending activities without a license” or without permission from the state, the department said.
An order was also issued by the state to Roosevelt Poe of Buford, Ga., who is accused of making misrepresentations in the loan files he submitted to mortgage lenders, the department said in a separate statement.
In Minnesota, a combination of the subprime mortgage market fallout, slowing home sales and tougher regulations has reduced the number of licensed brokers in the state.
According to the Minnesota Department of Commerce almost 90 companies have given up their broker licenses since January.
Pat Martyn, executive director of the Minnesota Mortgage Association, said in a statement to MortgageDaily.com that “the reason there is a decrease in the number of licenses being renewed is the constricting market place.”
