Refinancing boom increases ranks of mortgage brokers

Just laid off? In the process of being laid off? Thinking you’re going to get laid off? Or, just thinking you want a different job?

One industry you may want to visit is the mortgage business — instead of laying off, it’s paying off. Even in a tepid economy, mortgage brokers are staying busy.

?These last two years (2001-2002) have been the best back-to-back years I’ve ever seen, and I’ve been in the business since 1978,? said Gary Broaddus, president of the Colorado Association of Mortgage Brokers (CAMB) and president of Green Mountain Mortgage in Lakewood. ?We’ve also seen a 20 percent increase in membership (in CAMB).

The reason? Interest rates lower than a whale’s belly.

?Anytime we see low rates, we see an increase in mortgage originators,? Broaddus said.

And getting into the field isn’t tough. Many courses designed to get originators in front of customers last just two days and cost from $350 to $500. However, there are many other opportunities to learn more.

The Colorado Mortgage Lenders Association (CMLA) in Greenwood Village offers a six-course training session at the Community College of Aurora and Colorado State University. Students may take one, some, or all six courses.

Also, students and industry professionals may apply to CMLA for the designation of Certified Mortgage Lender (CML). Information about it is available at http://www.cmla.com/CMLProgram.html.

And once mortgage brokers finish their course work, there is no standardized test to pass. And even if you’re a felon, you can become one.

?I know convicted felons who are loan originators today in Colorado,? Broaddus said.

Broaddus said that’s because there is no licensing requirement to be a mortgage broker in Colorado. ?Anyone can come into this state and open a mortgage company,? he said.

Broaddus said 47 states have either licensing or a registration process, but not Colorado. That might change, however, if the Colorado Association of Mortgage Brokers has its way. Last year, CAMB introduced a bill to the state Legislature to mandate licensing for the industry. It passed the Senate but sunk in the House. CAMB plans to re-introduce the bill in 2003.

But Chris Holbert, executive director of CMLA, said licensing ?does not solve the problems that exist in our industry.?

?Here in Colorado hair dressers are licensed, yet we can still receive bad haircuts,? Holbert said. ?Automobile salespeople are licensed, yet we can still pay too much for a car. With all due respect to those professions, as consumers, we can find great and terrible service, high and low prices, good and poor quality, in both industries.?

The state Legislature passed House Bill 1259 in 2002. The bill deals with fraud and other so-called predatory lending and deceptive trade practices in real estate finance. It also gives state courts the authority to issue restraining orders to prevent individuals convicted of fraud from originating mortgage loans in Colorado. HB-1259 was signed into law in early July 2002.

Holbert said other states are using HB-1259 as a model for legislation to address predatory lending.

A first cousin to mortgage brokerage that also appears to be doing well these days is a loan officer. Ronald Kershner, assistant vice president and loan officer at Bank One in Boulder, said his bank has done a ?bunch of hiring and expansion? in 2003.

?In Colorado we have doubled our workforce. I would say right now while rates are low and there is a lot of refinancing going on that our industry is strong,? he said.

However, both Kershner and Broaddus said that when rates go up, the refinance side of business will likely slow down and the industry might see layoffs.

So what’s the difference between a loan officer and a mortgage broker? Loan officers are generally employees of banks and sell bank products. Mortgage brokers are often independent agents and can be paid by the loan applicant or the funding lender, usually a wholesale mortgage banker.

Pay for loan officers can be commission or salary or both. Kershner said starting out it could be fairly lean especially if paid strictly on commission, but with a good referral base, he said loan officers are ranging from $50,000 to$100,000 per year.

?With the refinance market we have been in lately you could double and triple these numbers, but this would typically not be the norm,? said Kershner.

The majority of mortgage lenders are on 100 percent commission or a combination of base plus commission.

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