My New Blog

There is a new Mortgage Loan Originator Licensing Law operative in WA this year and I would like to tell you about it. Also, there are ongoing efforts to blame the mortgage brokers for the current “subprime mess”. I would like to rebut that.

The Always Sensationalist Media, abetted by our esteemed Federal Reserve Chairman, have charged that the mortgage brokers are responsible for current subprime difficulties. This is nonsense. While brokers originate approximately 60% of the mortgage volume in this country, we do not underwrite loans, as charged by Mr. Bernanke; which is to say, we do not make credit decisions. My clients know this, as I have had to irritate more than a few of them by insisting you find some piece of paper wanted by the lender before they would lend. Why do we originate most of the mortgage loans? Because 1) we save you money, and 2) we are very service-oriented.

The newly effective Mortgage Loan Originator Licensing Law is relevant because it underlines our credibility. We now must adhere to a regimen of State-imposed standards. This is a good thing, one which I had hoped the State would adopt almost since I entered this business 12 years ago. Some 15,000 people have applied for a mortgage Loan Originator’s License. An estimated 3,000 have passed the State exam. I am one of them. It is also required that we take 2 Continuing Education classes each year and that this year 1 of those classes be Ethics. I have taken both classes. The initial license application must be accompanied by a set of fingerprints and is subjected to a background check. If the applicant has committed a felony within the past 7 years, the application is denied. I am proud to tell you that I am a Licensed WA Mortgage Loan Originator and that my License Number is 510-LO-34002.

H. F. Pete Nelson

Sr. Loan Originator

License #510-LO-34002

For those with average-to-good credit and reasonable equity or some money down, the “conforming” mortgage market remains liquid and competitive. 30-Year Fixed Rate mortgages can be done in the 6.0% range (with standard loan fees) and Jumbo loans, i.e. loan amounts over $417K, are in the 7.0% range. APR is of course in both cases higher. Sub-prime money is also available but it is scarce and expensive. “Stated Income” and 2nd mortgages are, however, harder to do across the board. But while mortgage markets are tight, those with good credit who can document their income will have no problem. Anything Fannie Mae or Freddie Mac will buy, including Alt-A type loans, can be done. And the FHA and VA routinely do what the conventional market considers to be sub-prime.

Interesting times, but the sky has not yet fallen.

H. F. Pete Nelson

Sr. Loan Originator

License #510-LO-34002