New Protections

Part of the reason we’re in the present mess is that many of people who originated loans during the housing bubble had no business doing so.  In the heyday, mortgage brokering promised a lot of money without requiring a lot of skill.  This attracted more than its share of scoundrels.

Personally, I know of one loan officer, still in the business I understand, who wrote subprime loans in between jail stints for drug possession.   Let’s call him, Jimmy.  Something of a local legend in the biz, there are lots of Jimmy stories.  He reportedly made forty-grand or more a month suckering decent people into bad deals. 

He even continued writing new loans in the prison yard using a smuggled cell phone.  Since he couldn’t go to closing during these stretches, Jimmy would even send his mother to the table to make sure that no honest title rep informed his clients as to how obscenely overcharged they were.

Fortunately, there should be a lot less of these reprobates coming into the mortgage business.  Starting last July, the state of Virginia put a new law into effect to raise the notoriously low barrier of entry into this industry.

Part of this law requires employers to perform background checks on any new employee who may have access to or process personal indentifying or financial information of a Virginia customer. 

Mercifully, new employees do not need to be fingerprinted.  But it is a thorough check.  It includes a criminal history generated by the Virginia State Police.

In no instance can a mortgage company employ someone with any felony or any misdemeanor involving fraud, misrepresentation, or deceit.

That means there will be less Jimmy’s entering this industry.  And that’s no small comfort.