Hawaii formed a new task force to agree on new industry regulations

In Hawaii, as in many states, the mortgage lending industry has few regulations beyond filling out an application and paying a licensing fee. The rise of new mortgage brokers and solicitors in Hawaii, whose numbers are estimated to have grown by about 30 percent in the past year, led to the discussion about industry regulation and led to the creation of a task force.

Hawaii’s pricey real estate market, coupled with the 1999 repeal of a law that had required bankers and brokers who did business in the state to have a physical office here, has led to incredible growth within the industry both in sheer numbers of lending professionals and in complaints.

The Hawaii’s mortgage lending industry historically has supported regulation. The mortgage lending industry is big business in Hawaii and ranges from large companies to people working from home or out of their cars. The regulation requires background checks for mortgage solicitors and brokers, testing, ethics training and continuing education. The bigger firms already follow this and it generates good business.

Most of the mortgage lending industry isn’t opposed to increased regulation as long as it does not lead to increased costs and the rules are applied across the board. Moreover, most legislation starts out with good intentions, but changes as amendments get added by the Legislature.

According to the surveys in the last few years, home-buyers as a part of Hawaii’s frenetic housing market are paying the second highest closing costs in the nation. Hawaii buyers, who often choose to pay more points, also paid higher appraisal on their first and second mortgage including attorney fees.


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