Provides for the regulation of mortgage service companies and for funding. (8/1/12)
The legislation is expected to have a significant impact on state laws governing the mortgage servicing industry by creating a clear regulatory framework for companies engaged in this area. By requiring registration and ongoing education for service company employees, the bill seeks to promote higher standards and accountability within the industry. This could lead to improved consumer confidence and protection as consumers will be dealing with better-qualified personnel in mortgage services.
Senate Bill 380, introduced by Senator Broome, establishes regulations for mortgage service companies operating in Louisiana. The bill mandates that all such companies must register with the Office of Financial Institutions and adhere to certain standards, including obtaining industry-based credentials certifying their competency. It aims to enhance professionalism within the mortgage servicing sector, safeguarding consumer interests by ensuring better-trained professionals manage mortgage loans.
The sentiment surrounding SB 380 has been generally positive, particularly from consumer advocacy groups who believe that the proposed regulations will lead to better industry practices. Supporters argue that the bill addresses critical gaps in oversight and professionalism within the mortgage servicing field. However, there are concerns among some industry stakeholders regarding potential costs related to compliance and the impact on smaller service providers who may struggle to meet new requirements.
Notable points of contention include the balance between consumer protection and the operational burden placed on mortgage service companies. Critics have pointed out that while improving professionalism is essential, the additional layers of regulation and the costs associated with registration and employee training might disproportionately affect smaller firms. This has raised questions about whether the bill could inadvertently reduce competition within the mortgage servicing market in Louisiana.