American Banker (08/13/08) P. 3; Flitter, Emily
Some banking industry observers are expressing concern about the potential effectiveness of a new registry for licensing and policing mortgage brokers because enforcement would be handled by individual states. "You'll have 50 or so different entities enforcing them with different budgets and different experience," New York banking lawyer Doug Landy says of the new federal and state mortgage laws. Also, many industry experts say mortgage brokers still have an incentive to steer borrowers into more expensive loans because the newly enacted housing bill fails to ban yield-spread premiums. Geoff Smith, vice president of the Chicago advocacy group Woodstock Institute, says mortgage brokers' lack of fiduciary responsibility to borrowers is a key reason for the housing crisis.
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