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Jan 04 2008

Regulation of Bond Originators

Posted in Property Finance, Property Matters

3 Comments

Seven American states started this new year by announcing Mortgage Broker-Licensing Laws, an Internet-based system introduced to supervise mortgage brokers.

The system creates a uniform application for mortgage brokers and a database that banking regulators can use to track brokers who try to work after being banned. The system is mandatory for brokers doing business in cooperating states and regulators will be able to penalise brokers who operate without a license.

This on the eve of the introduction in South Africa of new industry qualifications for Estate Agents. Leigh Roberts stated in an article he wrote in Business Times: ” Notwithstanding the pro’s and con’s of mortgage broking, this industry will burgeon as it has done in other countries. ” The bond origination industry in South Africa, as he predicted, has had a rapid growth.

The ‘fly-by-night’ bond originators, as with estate agents, will always be a part of our industries. Lets hope that the Bond Origination industry will regulate itself before political interventions and various new acts of Parliament are imposed. At PRO-PROP we go to great lengths in our endeavors to ensure that the Bond Consultants introduced to our clients are qualified and effective.

Source: The Associated Press, Alan Zibel (01/02/2007) (Daily Real Estate News.January 3, 2008)

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3 Replies to “Regulation of Bond Originators”

  1. John Masters says:

    Interesting information thanks for writing

  2. Payday Loan says:

    My boyfriend and I understand your intelligent conclusion concerned with Regulation of Bond Originators. Your paragraph will be really pragmatic in specie to my sister in Grand Saline !

  3. Yes, I agree the mortgage bond origination industry is in desperate need of regulations. However, this extends to areas far more important than “uniform mortgage applications”. The following needs to be addressed:

    – Protection of consumers right of choice
    – Uncompetitive behaviour
    – “Buying” of business and clients
    – Falsified documents and fraudulent information
    – Failure to disclose information that will assist clients in decision making
    – Failure to inform clients of products and service available to him / her and providing a comparison. It’s about more than just the interest rate discounts.
    – Failure to disclose information that will assist the banks in making a proper credit assessment.
    – Proper training, examination and certification of all originators, irrespective of the length of service. Unfortunately, the older the originator, the more bad habits they have picked up along the way.

    Once the industry has been properly regulated, you will soon see the end of “fly-by-night” originators and hopefully you will be left with an industry that conducts itself professionally and ethically.

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