An Interview with OAMB Immediate Past President Rod CraigTara EnnisOAMB, Rod Craig, HB 2764, Oregon Association of Mortgage Brokers
The following is an interview conducted with OAMB Immediate
Past President Rod Craig regarding HB 2764, the proposed broker
educational requirement bill.
Please provide a brief description of HB 2764.
HB 2764 requires a minimum education level for both loan
originators new to the Oregon mortgage industry and those who have
been in the industry. It basically sets a minimum educational
criteria for them; whereas none currently exists.
Are there minimum educational requirement laws currently on
the books in Oregon?
No, there are none as of yet. HB 2764 also allows for a criminal
background check for any individual entering the industry to become
a loan originator. The primary intent of the bill is to protect the
consumer.
How will HB 2764 impact the Oregon mortgage
industry?
HB 2764 will undoubtedly have a positive impact on the mortgage
industry in the State of Oregon. It has overwhelming support from
the industry, as well as from real estate and escrow agents and the
Department of Consumer and Business Services. Most in the industry
feel this bill is long overdue.
When was HB 2764 proposed?
The bill has been worked on for approximately a year and a half;
however, it has been in the works for more than three years. The
Oregon Association of Mortgage Brokers has been working on this
type of legislation for well over two years, gathering data and
talking with a number of groups. The bill was finally drafted and
introduced in January of 2001.
What is the current status of HB 2764?
To date, HB 2764 has passed the House Committee with a vote of
eight to two. And it recently passed the House floor by a vote of
51 to seven.
Who is the author of the bill and has HB 2764 received any
support from other legislators?
Rep. Bill Witt (R-Cedar Mill) is the sole author of the bill,
and has been very supportive of it since its inception. Rep. Jerry
Krummel (R-Wilsonville) and several other representatives have
demonstrated some support; however, Rep. Witt has been the greatest
help in the Oregon legislature so far.
Was HB 2764 drafted entirely by Mortgage Brokers?
HB 2764 was drafted directly from the mortgage industry with
input from consumers. However, the bill has been primarily driven
by OAMB.
If HB 2764 is passed, when will it become
effective?
HB 2764 would become effective in January of 2002.
Please describe the committee responsible for overseeing the
continuing education curriculum.
The initial draft of HB 2764 detailed the statutory
establishment of an education committee that would oversee and
control the curriculum. This was removed in favor of an advisory
committee which is currently in the statute. The State of Oregon
will certify programs, but consult the advisory committee regarding
format and content of curriculum. The industry believes this is the
most important component regarding education. We are the ones to
best determine and control a curriculum that is meaningful, timely
and relevant to the consumers and industry in which we serve. The
current statute will utilize the advisory committee in lieu of
establishing an entirely new committee.
Who will the advisory committee be comprised of?
The committee will be comprised of an equal number of brokers
and bankers who are currently affected by the laws on the books.
Mortgage Brokers would welcome consumer input since ultimately they
are the people whom we are proposing this bill for. We would like
to see representation on the committee from consumers so the
education being offered actually benefits them. This is not only an
industry bill, but is also a consumer protection bill and tries to
balance the best interests of both parties.
How will HB 2764 affect Mortgage Brokers outside the State
of Oregon?
Before out-of-state brokers could originate loans in Oregon,
they must first read and understand Oregon laws. We believe that
right now this is somewhat deficient in Oregon because individuals
do not know the current laws. Before anyone can be held
accountable, we must first make sure they are aware of our laws. By
establishing education requirements, we have set a standard where
you can hold someone accountable. The educational component really
has to do with teaching regulations and core requirements. It has
nothing to do with sales and marketing--what we call "fluff
courses"--but nuts and bolts courses. Courses that teach what
disclosures are required in a transaction and when they are
required--these disclosures are primarily there for the benefit of
the consumer in the first place.
Will HB 2764 drive away brokers from conducting business in
Oregon?
I do not believe this will happen because one of the ideas with
the educational curriculum is to adopt courses that can be taught
in a variety of ways, whether it is a classroom environment, via
the Internet, through correspondence courses or on a CD-ROM. For
example, the Mortgage Banking Association course (CampusMBA) is
long standing, has a great history, can be facilitated from
anywhere in the world and is an overall fantastic course. It can be
facilitated from anywhere in the world to gain the necessary
education. I think the education requirements will change how
individuals from outside Oregon conduct business in the state
because it requires them to enter the industry and invest something
into their business. In Oregon, you often run into individuals who
can enter the industry with very few hurdles in their path. They
then take a few refinances and eventually, hastily exit the
industry. These individuals are not taking the time to learn the
business and conduct business the right way. All we are trying to
do is to basically tell people exactly how it needs to be done so
it benefits everyone.
How will the educational requirements apply to those who are
currently in the industry, but did not previously have to adhere to
educational requirements?
If they come from states with similar requirements, these
requirements can be adopted. If a person has been in the industry
for three years, they will be grandfathered into the core
curriculum courses, such as RESPA and TILA. However, they will
still be required to pass the examination on the rules and
regulations in the State of Oregon and be subject to a criminal
background check.
How many continuing education hours are required?
Currently, 20 continuing education hours are required. The
director has the authority, as established by rule, to decrease
these hours to no less than 10, depending upon experience and
qualifications, after the initial 20 hours have been completed.
Who will design the curriculum?
Courses will be certified by the State of Oregon Division of
Corporate Finance Securities and the Division will be in charge of
the content and delivery method. They will not be responsible for
providing the courses. We believe that because there are so many
education providers, competition would actually be created.
Education providers will meet with the advisory committee to have
their curriculum approved. Once their curriculum is approved, they
can offer it at any cost they feel appropriate.
Overall, how will consumers benefit from HB 2764?
With the trends of different types of identity theft and fraud
that exists today, consumers need a first line level of protection
so they know the individual taking their loan application is not a
convicted con man. Consumers also need to be assured that the
individual taking their loan application knows more about the loan
process then they do. Until an education standard is established,
there is no way to know this. We feel that most consumers believe
we are already trained and educated licensed professionals. As much
as 80 percent of the business is being done by third party
originators and 80 percent of the first mortgages made in Oregon
are being done away from the office. There needs to be some type of
accountability measure when they are out in the field, removed from
the eyesight of the supervisor. The Department of Consumer and
Business Services has communicated to us that "...the bill will
enhance our ability to protect consumers against unfair and
predatory lending practices."
Are any consumer groups working with you to support HB 2764
or are any groups opposed to this measure?
There has not been one particular group jumping into the
legislative arena. There have been no objections even though OAMB
has contacted numerous consumer groups. However, there is
opposition from insurance lobbies, in particular, Prime America is
the greatest objector. They want a new exemption to be established
for insurance companies. The Oregon Mortgage Bankers Association
has finally taken a neutral stance on the bill.
HB 2764 allows loan originators to work with only one
company. Please explain.
Currently, there are problems with loan originators initiating
applications in two different company names by sending them to two
different places (by definition, this is truly a Mortgage Broker).
They have been working unlicensed. Under HB 2764, FDIC banks,
state-chartered banks, credit unions and finance companies are
exempt. This bill will not allow an individual to work for an
exempt and non-exempt entity at the same time--they will have to
choose one or the other. This is directly for the benefit of the
consumer. The consumer needs to know who they are conducting
business with and the originator needs to explain this to the
consumer.
Will this cause any problems?
No, it will not. One of the greatest problems in Oregon is that
a broker may receive a complaint from a consumer about an
originator and find that during the investigation process, the loan
application was taken under a different company name.
Is there a complaint committee?
No, there is not a complaint committee. When an action is
brought against an individual or company, a hearing process occurs.
A grievance committee existed before HB 2764. No
committee has been created specifically for this bill.
For more information regarding HB 2764, contact OAMB
Immediate Past President Rod Craig at (503) 682-1515 or fax (503)
682-0979, or association Lobbyist John McCulley at (800)
650-9076 or fax (503) 566-3420.
