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Residential Department: From the Top: August 2007


From the Top

The debate and bewildering ambiguity surrounding mortgage-originator licensing has gotten old. In some cases, almost 220 years old.

At its root, the issue of a standardized, national licensing system’s necessity and ultimate function brings up questions similar to those posed in the Federalist Papers — the user’s manual for the U.S. Constitution.


  • Can a national system manage to cover the same ground as dozens of smaller ones?
  • Can a nation without a standardized guideline protect itself against factions, special interest and fraud?
  • Can interstate commerce exist when states’ regulations differ so much?

All of the above are central to the arguments currently transpiring between two licensing factions.

One one side, the Conference of Bank Supervisors and the American Association of Residential Mortgage Regulators (AARMR), which have worked toward creating uniform standards for lender and broker licensing.

As AARMR President George Kinsel tells us in our Q&A, this proposed national registry not only can cut down on the legwork of those seeking licenses on multiple states — to say nothing of the cottage industry of private license-facilitation companies — but also can help weed out “bad apples” that one state might not catch on its own.

Not a bad idea, says the National Association of Mortgage Brokers. In fact, according to a statement from President Harry Dinham, the group definitely supports stronger licensing requirements for individuals, background checks for all originators and increased protection for customers — none of which, Dinham says, the national-registry proposal has.

Will this fight last another two centuries? Not likely.

But as events unfold, an eye toward logic and history could lead to a palatable solution.


Geary Britton-Simmons For questions on this article, call (800) 297-6061 or e-mail

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