MORTGAGE BORROWER PROTECTION

Home mortgages are most often the largest loan s one will ever make in their lifetime. Most people who get a home mortgage are unaware of the both the inherent risks or the opportunities available, and may only go through the home loan process one or two times at most. Mortgage lending is complex, even for professionals. There are problems waiting to happen. Unbelievably, mortgage lenders are not licensed in Alaska so, anyone reading this blog in Alaska, could become such a lender without any qualification. I sponsored HB162 for consumer protection. Following is the testimony I presented to the House Finance Committee in support of my bill.
-------------------------------------------------------------------------------------Mr. Chair, Members of the Committee:

Thank you for hearing HB162 today. First of all, I need to disclose I’m a licensed real estate broker, currently in referral status, and that my license is hung as a broker-associate with Prudential Vista in Anchorage.

For most of us, the biggest loan we’ll ever get in our lifetime is for the mortgage on our home. If we don’t get the right loan, with the right terms, it can be a very expensive thirty year mistake. Most of us who take out a mortgage don’t know much about the hidden mechanisms and inner workings of these loans, or ever changing state and federal mortgage laws – it seems like something’s different every day.

I recognized that fact every day when I was a working Realtor. The most important thing I know about mortgages is what I don’t know – and that’s why my first step, when, as a Realtor, I was fortunate enough to have a homebuyer, was to take that homebuyer to lender who knew what they were doing – a lender I had reason to believe knew the law, a lender who was qualified to match a proper loan to my buyer, work through any problems, and whom I had reason to believe was honest. And, quite frankly, having that good lender was even more important than finding my buyer the perfect house in the perfect location.

The importance of qualified lenders to consumers is exactly why I sponsored this bill. This bill has strong support from the Alaska Mortgage Bankers Association, the Alaska Mortgage Brokers Association, the Alaska Independent Lenders Association, and Realtors throughout the state. The Alaska Division of Banking and Securities also supports the bill – and I hope this committee joins in that support.

Persons working in the Alaska mortgage industry are not licensed and they are not required to have any training. Let me repeat that. Persons working in the Alaska mortgage industry are not licensed and they are not required to have any training! Alaska is the only state in the union that doesn’t regulate mortgage lenders.

Tattoo artists, and the person who cuts what little hair I have, and all kinds of other people are licensed, and must have training but, currently, someone who attempts to arrange a mortgage for you, your kid, or your mother, needs no training or license at all. That’s scary. That’s incredible. In fact, that’s incredible. Not only that, none of these people are required to have background checks, and are not subject to periodic examination by the Division of Banking and Securities. This bill fixes that.

Some people would like to exempt affiliates, but many of them are internet companies operating outside Alaska. I would like the bill to license everybody in Alaska who makes a home loan. There are other people here that will testify and speak directly to this point if requested.

As I said, state and federal laws concerning loan originations are complex and ever changing, and one needs to be an expert to speak with competence on the subject of this bill. I am not that person. However, the Division of Banking and Securities, and people in the lending industry, are prepared to walk you through this bill, explain why it is written as it is, and answer questions. This is a consumer protection bill of great importance, and I respectfully ask your support for HB162. Thank you.
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The House Finance Committee passed my bill without object, and it is now goes to the House floor for a vote and, if it passes there, to the Senate. Wish me luck!