New Federal SAFE act

[ABC]

Anyone familiar with SAFE and how it will affect Ch7 or Ch13 filers?
Different states seem to interpret "submit a credit report" as wide open.

http://mortgage.nationwidelicensingsystem.org/Pages/default.aspx

This would be crazy if say, your spouse was hurt in an accident , filed BK, and you lost your job also as a result.

[OweTooMuch]

Does it say in there that you will not be hired with a BK on your record? I did not see that. I am thinking if you had severe financial issues and you cleared them legally with a BK instead of just charging everything off that should be OK. Am I missing something here?

[ABC]

Some states have already said that but CA is not clear. My assumption is that there is a floor score around 620 . If your score is below that you can then submit a Letter of Explanation for approval.

Any way you slice it there will be less people in mortgage business for 2010 due to less business and tough govt regulations.

[Amigo]

I called the national licensing board and my state's commissioner of banks office regarding this. I am considering filing chapter 7 very soon. I was told by the commissioner of banks office that I must report to them that I have filed bk within three days if filing. After that my case goes before a review board. They then determine at their discretion whether to allow me to continue to be licensed as a loan originator or to revoke my license. If revoked, they told me that I can appeal. However during the appeal process, I am not allowed to originate loans. This would most likely result in a job loss. Scary.

Although they said that filing for bk is not grounds for license deactivation, they say the review board reviews your case to determine if you are deemed financially responsible. They said using too much credit without the ability to pay back could be looked at as financially irresponsible.

All in all, I'm not entirely sure what will happen. At this point, filing chapter 7 is going to be necessary for me in my situation. I guess I need to be prepared to make a career change too in the event that I am forced out of the mortgage business for filing a chapter 7.

[ABC]

You might go to a federally licensed bank. The way I read it now , they are exempt and only have to register.

Go figure.

[Amigo]

Yes, I am currently exploring that option just in case. Plan is to apply, interview, and get an offer on the table with a future start date with a federally chartered bank. That way if the state banking commissioner office revokes my license, I'll already have employment lined up. It just sucks not knowing exactly what the licensing board will do about a bk filing.

From what I understand, it all comes down to how they view it. On the positive side, I currently have credit scores in the 700's with no derogatory items on my credit. Problem is that I have had to rely so much on credit for basic living expenses in the past two years. All the while, huge chunk of my paycheck goes to pay minimums on credit cards. I have severly cut expenses, liquidated retirement accounts, sold my home, and am now renting with much lower housing expenses. I feel confident that I can show the licensing board that I have always been financially responsible. I just have to get out of this never ending cycle for the sake of my family's future. Hopefully they will understand.

[Gracious]

I am in the same position

It is crazy that the Safe act is Federal and will cause anyone with a BK OR dings on their credit report to be banned from being a LO. However, they can not restrict your license as it is issued by the state. You could become a Realtor as they do not restrict licenses for BK's. It is sadly Ironic that we are protected by the constitution for our indebtness through the Bankruptcy Laws yet the same federal government has instituted a witch hunt, especially for loan brokers through this SAFE act. I will probably get the boot too. Maybe we can all stick together and employ a class action attorney to sue the feds and the banks as this seems clearly unconstitutional, perhaps an antitrust violation and even racketeering (RICO ACT) by the big banks and their lobbyists. They are squishing the competition any way they can with all this legislation. I guess all the big bank Piggys will get their market share above the 55% that they already have, at least for a while. I wish them all the worst in their lives.

[Gracious]

all LO's Stay in touch here

All Loan officers and loan brokers affected by this SAFE act, stay in touch here
so we can make our voices heard. With all the BK"s , lates, charge offs, forecosures, short sales, loan mods; millions of families are being affected by the wall street and big banks with their CDO"s, derivatatives, and design and promotion of the subprime products that have brought this country to its knees and caused so much pain for so many families. Let us bring the fight to them through some level headed members of congress, smart attorneys and public relations firms. let us put them on the defensive for their devious ways.

[mike22]

I am in the same situation. I have been in this industry as an originator for 13 years with a clean record, I do good buisness.

I opened a buisness in 2006 and we all know that in 2007 everything came ungluded. Here it is 2010 and I finally understand that I am not going to make a comeback and avoid a Chapter 7. My buisness failed and my production, like most is down.

This BK will give me a fresh start just the same way it has given a fresh start to countless other small buissness owners and individulas. I have no intention of leaving this industry but with so little guidance on how my credit will be treated it is horrible worry to contend with. BK is the only solution that I have to recover, it has been a long 3 years to put my family through. I am at peace with the BK but now to be up in the air about my chosen career is horrible.

I hope that at the year comes to a close that more people including LO's will join this thread with information an opinion. The guidance that exists is very vauge.