Should your mortgage lender be licensed?

You need a license to cut hair. You need one to charge for massages in many states.

Shouldn’t you need one to handle the largest purchase most people make? Unfortunately, in most states, mortgage lenders do not need licenses.

The good news is that a housing bill being considered by the U.S. Senate includes a requirement that mortgage originators across the nation be licensed and registered. The bad news is that this is not already a requirement.

I can’t help but wonder if much of the subprime lending crisis that hit the country could have been avoided had mortgage originators been required to take a competency test and earn a license. Let’s hope the provision makes it through. I’d feel more comfortable knowing that the mortgage lender sitting across the table from me had to do something to earn that title.