With the National Mortgage Licensing System in full swing, many are hailing it as a much needed boost to fight mortgage fraud. Brokers, such as those licensed in states like Georgia, have to submit a financial statement. They can then be denied for not being financially responsible due to not paying a student loan or child support, or providing credit reports which may show bankruptcy or liens. It makes sense that those we go for financial advice should be financially stable themselves, with good credit. The problem is that some states that need it the most are still not a part of the system.
Florida, which has been voted number one for mortgage fraud for years, as of January 2010, is still not part of the system along with several other states. So when consumers access http://www.nmlsconsumeraccess.org/ and try to look up a broker or business for Florida the information does not exist. This also means that brokers that may have had licenses suspended in other states before the induction of the NMLS system, could have gotten licensed in Florida and be conducting business right now. Many brokers that had renewals last year in 2009 in the state of Florida did not get passed through the NMLS system and have renewals good till 2011. Although these brokers will have to conform to the new system by December of 2010 that is a entire year to do more fraud and damage to the system.
Florida also currently does not maintain a accurate liaison between its corporation renewals and licensing renewals. The means that a corporation that is not longer in existence in the state can still be conducting mortgages as a business. According to several corporations checked on the state of Florida’s website www.sunbiz.org against license checks on www.flofr.com, licenses were still valid on corporations that no longer existed and were dissolved. This poses great threats to the consumers, who may be having legal financial documents being completed by non entities. The validity of the documents could come into play at a later date. This could also jeopardize the licenses of those working for business, as they need to have a valid corporation to attach their license too.
The same applies to HUD, which has lenders also approved for FHA financing for consumers, yet the corporations are no longer in existence. When a consumer looks at www.hud.gov lenders are showing approvals that are no longer in business, causing the public to be mislead.
The National Mortgage Licensing System is a great concept, but until all the states that are still not members such as MO, NV, FL and more complete their membership, unscrupulous mortgage brokers, lenders and businesses can find ways of beating the system. Tightening up also needs to be done so that all financial departments are linked together to communicate under one system that protects the consumer in one of the most important transactions they may ever do in their lifetime.