I just read in our local paper that nearly 40 percent of Indiana’s mortgage brokerages lost their licensing because on Wednesday because they have not complied with a “new” law aimed at raising the standards of the industry in a state with one of the nations highest foreclosure rates.

While I am glad they are making changes, I am mad that it took drastic measures to get these changes made. I could see the writing on the wall as far back as a few years ago. I read about the mortgages that people were getting and wondered myself how they were going to make the payment when the interest rate increased. I feel as though they took advantage of people. We trust lending institutions to not loan us money when they feel we are at risk. Isn’t that they way you understand the lending business to be? Are there not check offs they use to see if giving a person a loan is a good idea?

To be sure I was clear on my understanding of what a mortgage broker does, I looked up what Wikipedia gave as the role of a mortgage broker.

A mortgage broker acts as an intermediary who sources mortgage loans on behalf of individuals or businesses.

The majority of mortgage brokers are regulated to ensure compliance with banking and or finance laws in the jurisdiction of the consumer; however, the extent of the regulation depends on the jurisdiction. Only one state within the U.S. has no laws that govern mortgage lending.

By the way, the law the brokerage firms are not complying with went into effect in 2007. It requires that each brokerage firm shall name a principal broker with at least three years experience who has passed a state exam and will oversee his company’s business affairs. Maybe no one wants to be in charge.