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State Mortgage Licensees Tumble

State Mortgage Licensees TumbleOhio, Washington report biggest declines

January 4, 2008


Mortgage regulators in several states have reported a significant drop in the number of license holders.

Ohio has seen its mortgage licensees drop by more than one-third.

Licensed mortgage brokers, which numbered 2,239 on Jan. 1, 2007, have declined to 1,611 as of Tuesday, Dennis Ginty, a spokesman with the Ohio Department of Commerce, told in an e-mail Thursday.

Second mortgage registrants have fallen to 1,704 as of Jan. 1 from 2,905 a year earlier, Ginty said.

He noted that both brokers and second mortgage registrants are licensed by the Department of Commerce’s Division of Financial Institutions.

In Pennsylvania, a spokeswoman told in an e-mailed statement that mortgage broker licenses have declined from 5,727 in January 2007 to 5,532 this year.

But Pennsylvania mortgage lender licenses saw a much bigger decline, tumbling from 3,864 last year to 2,940 this year, she said. The decline in second mortgage lender licenses was 20 percent, while first mortgage lender licenses were down 29 percent.

Texas reported a more moderate decline.

Licensed loan officer totaled 16,903 as of Thursday, down from 18,291 on Jan. 7, 2007, according to Sandra L. Weller, director of licensing for the Texas Department of Savings & Mortgage Lending.

Licensed mortgage brokers in the Lone Star state, which were 6,578 a year ago, have fallen to 6,195, she said in her e-mail statement.

Weller noted that mortgage banking licenses, which are reported on a fiscal-quarter basis, have dropped from 431 on Aug. 31, 2007, to 399 as of Jan. 3, 2008.

In Washington, only 66 percent of 1,261 mortgage broker licenses had been renewed by yearend, the state’s Department of Financial Institutions reported Wednesday. Of 13,722 originator licenses in effect before Dec. 31, just 42 percent have renewed.

The licenses that had been active were obtained following legislation passed in 2006 requiring originators to be licensed, the state said. It denied 170 licenses for criminal histories, bad credit, or character and fitness issues.

“We understand that the reduction reflects a dramatic drop in loan activity due to the downturn of the mortgage industry and a number of firms going out of business or dropping their state license,” Scott Jarvis, director of the department, said in the statement. But “the low number of renewals — compared to the number practicing prior to Dec. 31, 2007 — is a concern.”

Washington, which said it expects hundreds of applications to arrive in coming weeks, warned the former licensees that they face stiff penalties if they originate any loans on or after Jan. 1.

“The department notified licensees numerous times in a variety of ways informing them they will not be allowed to do business in 2008 without a license and that they need to pass the competency exam prior to seeking renewal of their license,” the announcement stated.

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