ANDERSON — A statewide crackdown on unqualified mortgage lenders could close some local loan offices.
Indiana’s Secretary of State Todd Rokita announced this week that roughly 70 percent of the state’s mortgage brokerage industry has failed to comply with a 2007 law requiring greater oversight. Most offices not in compliance by the Aug. 5 deadline must close.
Only four Madison County loan brokers were compliant as of Monday, according to Rokita’s office. Jon Herrington-Meeks of Prime Rate Financial Services in Anderson wasn’t one of them.
He said he’s in the process of completing the required background check and certifying examination, but because he is already certified through the Federal Housing Authority, he has longer to meet the state’s requirements.
Herrington-Meeks, who has been in the home loan business for 13 years, favored the new legislation, saying it would take all of the unqualified “fair weather players,” out of the mortgage market.
“That should give customers a little bit more comfort when dealing with an investment the size of a house,” he said.
Soon after the law passed in 2007, the state sent notice of the required test to all loan brokers licensed in Indiana. Another notice was sent in May.
“The mortgage and real estate industries are facing unprecedented and deserved scrutiny,” Rokita said in a statement, “and I intend to make sure Indiana homeowners have the opportunity to hire professionals that can do a competent job.”
Herrington-Meeks said his only problem with the new law is that it did not apply to bank loan officers.
“I think it’s a little ridiculous,” he said.
Jim Gavin, spokesman for the secretary of state’s office, said federal financial authorities, not the state, has authority over banks.
Mortgage brokers compete with banks for home loans by typically offering a wider range of financing options.
Chris Crull, a broker already in compliance with the new regulations, said banks are already well regulated and Indiana’s laws will only help give people more trust in the mortgage industry.
“It gets rid of the people who shouldn’t be in this business,” he said.
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