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Regulator Defends Record On Brokers

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By DON B. SAXON

The Tampa Tribune

Published: July 29, 2008

In recent days, considerable attention has been given to the licensing of mortgage brokers in the state of Florida. This was prompted by an article appearing in the Miami Herald which implied that the Office of Financial Regulation has been lax in its issuance of mortgage brokers' licenses. Nothing could be further from the truth. Our office takes licensing very seriously. In fact, nearly 30 percent of all mortgage broker applications are not approved. Our office has procedures in place that allow for checks and balances which require each application to undergo a thorough review, insuring that all state requirements are adhered to in the issuance of the license.

The Miami Herald reported that OFR licensed 4,065 persons who were "guilty of crimes that the law specifically requires regulators to screen," between the years 2000 and 2007. To date, the Miami Herald has been unwilling to provide my office with any underlying documentation supporting this allegation. Notwithstanding, my office is working to attempt to verify whether this figure is accurate.

The Herald article focuses on 12 specific cases regarding brokers whose mortgage broker applications spanned a 14-year period. The article fails to place these isolated decisions within the context of the fact that our office, which licenses numerous other occupations, has made as many as 25,000 individual licensing decisions in a year for mortgage brokers alone.

Our office has reviewed the registration data of the 12 individuals cited in the Miami Herald article to determine why the licenses were issued. It should be noted that these 12 were extracted from our office's database of 280,000 people who have worked in that industry over the last 10 years. Regarding the specific examples relied on by the Herald it should be noted that:

1. In one case, almost 10 years had passed since the applicant's most recent criminal infraction (which was not deemed serious enough to warrant a jail sentence) and the applicant had already been granted a Florida real estate license.

2. In another, the criminal offense of the applicant occurred nearly 17 years prior to issuance of the license, with no known intervening offenses.

3. In another, the applicant had been placed on six months probation for burglary of a conveyance 18 years prior to submitting his application.

The Herald fails to consider that state law does not permit our office to automatically disapprove all applicants simply because they have a criminal record. On the contrary, state law requires us to make each decision on a case-by-case basis.

Do we make mistakes? We all do. Did we make mistakes to the degree the Miami Herald has suggested? No.

I have asked our inspector general to conduct a thorough review of our mortgage broker licensing procedures and now invite the members of the Financial Services Commission to have their own inspectors general actively participate in this review. We have nothing to hide.

Don Saxon is commissioner of the Office of Financial Regulation.

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