If they don't take a state exam by January 2009, the Colorado Division of Real Estate says mortgage brokers are out of business.
Rod Shuster has been originating loans in the mortgage business for 12 years.
"We became the Wild West and it's not just here it's everywhere. We got creative just because we could and nobody minded now they mind," Shuster said.
Shuster is one of more than 10,000 mortgage brokers in Colorado who are going back to basics because that's what the law says they have to do. Shuster thinks the new laws will help reign the business in for consumers.
"The scope of the class was basic principles as well as law and regulations from Colorado's standpoint as well as the federal standpoint," Shuster said.
Shuster is the first mortgage broker in Colorado to pass the state's new licensing education requirements.
The new rules require 40 hours of
Erin Toll is the director of the Division of Real Estate.
"Now for the first time in history they have to work in the best interest of the consumer," Toll said.
The new law requires mortgage brokers to inquire into the financial status of borrowers. The brokers are only allowed to recommend a loan the borrower can handle.
"Sadly we have one of the highest foreclosure rates in the entire country so it's our hope with aggressive enforcement of these new laws that we can do something to put a dent in the foreclosures," Toll said.
Shuster says it is
"They are not going to be able to get swindled by somebody who doesn't really know what they are talking about. They will have at least had to have had a baseline core of knowledge.
We're weeding out all the people that probably shouldn't be in the business anyway if they are not willing to go through the exam," Shuster said.
The new licensing program actually went into effect in January 2008. There's a one year grace period for those who are licensed or will become licensed this year to actually take the course and then the test.
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