Just how SAFE is it?

Any firefighter or EMT will tell you that the worst thing to do in an emergency situation is panic. Whether it is the parent or a friend or even the victim himself, the guaranteed way to ensure a worse outcome is panic. I wish we could apply this to other facets of our lives. Sometimes we try to fix things that don't need being fixed and end up causing bigger problems then the ones we sought out to combat. This issue is really obsessed over in our society. We love it. We can't live without it. We thrive off of it. If you don't believe me, turn on prime time any night of the week. And before you run behind the barricade of blame that it is the networks' fault, they only give us what we want. But you turn it on and what do you see? Drama. Drama. Drama. People living ordinary lives with more drama then any self-respecting person could ever stand. And now that is 'reality' in our society. Normal problems that are blown way out of proportion and so the outcome is blown way out of proportion. I can't help but believe that this is seeping into the rest of our lives. I would be willing to submit that I know that it is.

Was there panic involved in trying to get our economy back on its feet? Was there some drama in how government (we as they are our representatives) fixed some of our economic problems?There was. One such outcome was the SAFE Act which instituted a federal licensing system and guidelines by which all mortgage licensees, schools, states, and other regulating bodies must abide. Yes, some states did need to regulate their licensees but many had to downgrade in order to be compliant with these new regulations. Others could were not prepared for such a change because of the substantial fees and costs. This goes without mentioning the fact that after this bill was compiled, passed, and assigned it was handed off to a non-governed third party that could address the issue as they wished. Not only were states obligated to pay an exorbitant amount of money to make changes and adjust to the SAFE Act, they had to give up their right and obligation to follow the demands of their citizens but had to submit to the demands of strangers who now wielded the shield and sword of federalism.

Time would tell that such a radical change was probably unnecessary, that it simply caused more panic and drama than it attempted to abolish. Many would even agree that the finger of blame was pointed in the wrong direction in this case. What can we learn from all of this? Any good EMT or fireman would tell you to relax. Breathe. Analyze the situation and look at the FACTS. Then make a decision. With that hopefully we can better combat the problems that will inevitably come.

Idaho SAFE Preparation Course TOMORROW

With Praedo's live SAFE exam courses in full swing, we are happy to announce another Boise Idaho class tomorrow. If you are in the Boise area and you have a couple hours to come join us, please do. This class will not only prepare you for the exam but combined with your other Idaho continuing education will allow you to opt of the required 20 hours of education (offer extends at the end of the year). Tomorrow's event will be held at the Hilton Garden Inn located on 7699 West Spectrum Street in Boise beginning at 9am. This course will be the beginning of a host of others that will help licensees prepare for the federal changes that have swept our industry.

Mortgage Brokers: Extinction or Purification?

It is simply human nature to assign blame when something goes wrong. I am not one who usually complains about human nature, I normally leave that to the philosophers and the anthropologists, but I feel as if this case is different. This case should make us all raise our eyebrows as to what is going on. When the tides of recession began to hit every shore in 2008, the blame assignments were being passed out. What surprised me and what should have surprised many more was who got the brunt of the blame.

What emerged was a lot of blame on the mortgage broker. Many more should pause and realize that banks created these loan programs. Banks did the underwriting, the due diligence, and the approving. Banks handled the investing and the hedging. Mortgage Brokers simply submitted the files and they take home the blame while banks get a bailout and a mere slap on the wrist.

What isn't surprising is the fact that this has led to a severe drop in the number of mortgage brokers in the industry. Market analysts are predicting that by the end of the 2009, the number of mortgage brokers will have dropped 72% since 2006. Many are calling it a purification, that only the 'creme of the crop' will be around by the beginning of the next year but others are worried that banks and a gullible federal government will not rest until there is an extinction of the mortgage broker as we know it. Only time will tell.

Utah Continuing Education Changes

We have seen some sweeping changes that the SAFE (Secure And Fair Enforcement) Mortgage Licensing Act has brought. It has, as we have said before, remodeled the mortgage industry as we know it. One of the areas being remodeled in the mortgage industry is continuing education for license renewal. Mortgage licensees must have 14 hours of continuing education during the fiscal year of 2010, meaning mortgage licensees will have until December 31, 2010 to complete the required hours.

However, the mortgage industry isn't the only one who is undergoing some 'house cleaning' issues. The Utah Department of Real Estate is now requiring 18 hours of continuing education for real estate agents and brokers for every two-year period. Everyone who has a renewal date after January 1, 2010 will have to complete the 18 hours of ce.

If you didn't see this month's Praedo newsletter, please email us so we can put you on the list! Contact us at support@praedo.com today!!! Don't let ignorance get you in trouble!

SAFE Act Testing in Utah Postponed

The Utah Division of Real Estate has collectively decided to postpone the new SAFE testing until September 1, 2009. This extra month gives 'on-the-fence' Utahans the opportunity to decide whether or not they should get their mortgage license. If you've been trying to decide whether or not you or someone else in your office should get licensed, now is the time to act.

While many states have postponed testing requirements until next year, The Utah Division of Real Estate has been ahead of the pack when complying with this new federal legislation. Many states have postponed SAFE testing until the middle of next year as they scramble to draft and pass laws that will allow for the type of changes that the SAFE act is bringing to the table.

Nonetheless the SAFE act has caused a lot of headache for the Utah Division of Real Estate. Not to mention all of the changes that the act is calling for, it also affects legislation that the Division has painstakingly fought for years and now much of it will fall by the wayside. On an administrative level, the Governor has been assigned as the Ambassador to China and the Director of the Division of Real Estate (an assignment appointed by the Governor) has also been assigned to a new position. These two changes bring a lot of headache to the Division, but in addition to all the changes that SAFE is bringing to the mortgage industry, it is no wonder why the testing has been postponed.

The End of Brokers?

I had the opportunity to meet with a senior manager for one of the largest wholesalers a few days ago. He met with a group of brokers and updated us on the industry and his company. He also solicited feedback from the attending brokers. One of the consistent themes throughout the conversation was treatment of us mortgage brokers over the last several months. It seems many are ready to blame the financial crisis on us. Obviously, this approach frustrates me as most of us simply sold the programs which were offered to us. We didn’t commit fraud. We didn’t misrepresent. We conformed with the program guidelines and very effectively sold the aggressive programs developed by the lenders. Over the last several months, I’ve been worried about the future of the broker industry. Every time we turn around, someone is making it more difficult to do business as a mortgage broker.

We posed the question as to the future of the mortgage broker. Finally, we received some positive feedback. The large wholesalers are experiencing outstanding returns on the third party origination business. The performance of the loans is excellent. The two largest originators nationally are most likely the largest due to their broker business. The lenders are again realizing that, if done properly, broker business makes sense. As the executive put it, the brokers are no longer the poster child for the mortgage crisis. As warehouse capacity increases and the industry stabilizes, mortgage brokers should be able to continue effectively serving the borrowers who have come to rely on our expertise, experience, and relationships.

Utah County Parade of Homes

Despite the popping of one of the largest housing bubbles the country has ever seen, there is one venue that is not being cancelled: The Utah County Parade of Homes. From the edge of Santaquin to the rolling hills of Alpine, 28 homes are 'decked to the halls' for all to come and see. You can download a map of the parade here. Open Daily 12:00pm - 9:00pm, closed Sundays and Mondays. Tickets are $10 each, kids 5 years and younger are admitted free. Praedo sponsoring a booth in Home #2, The Chatham located at 5937 W. Chatham Circle in gorgeous Highland. Come see us!