The superintendent of the Iowa Division of Banking says his agency has revoked a number of licenses issued to individual mortgage brokers, in the wake of the foreclosure crisis.
Tom Gronstal says the division started licensing individuals in July 2006. He says there were approximately 5,000 brokers who were issuing mortgages, but not employed by a financial institution.
Gronstal says the number is down to 1,653 individuals, "so there has been a dramatic reduction in the people involved in the industry." The Iowa legislature is considering a bill to re-write the broker, borrower relationship. Iowa Assistant Attorney General Patrick Madigan says the bill would legally require a broker to put the interests of the borrower ahead of their own financial interests.
Brokers also would be required to disclose when they stand to earn a fee from using a particular type of loan. Gronstal made his remarks on the Iowa Public Radio program "The Exchange."