Mortgage Bill Deferred

A bill that would have given the State Division of Financial Institutions increased regulatory powers over mortgage brokers and solicitations was put aside by the Senate Ways and Means Committee this morning. The number of people selling mortgages in Hawaii has more than doubled since 2000. Most are mortgage solicitors, who refer business to mortgage brokers. The bill was opposed by the 400-plus members of the Hawaii Association of Mortgage Brokers, which asked that the Senate committee delay action on the bill for a year.

While the current legislation is in progress, the scope of changes needed for the industry to endorse the bill is more than can be expected. The bill is expected to be reintroduced the same time next year. As a reponse to predatory lending practices, the bill was to make mortgage brokers responsible for the solicitors and originators who work under them. Passing a test was also put forward for mortgage brokers who wanted to obtain their license; they would also need to complete continuing education and be responsible for audits of their own records.