Michigan Rewards Goof-off Grasshoppers instead of Attentive Ants

The Michigan Loan Officer Registration Act (LORA) deadline of January 1st, 2009 proved unobtainable, so an extension has been granted.


December 27, 2008 -- BLOOMFIELD, MI – So much for being on the ball. Michigan just turned the Aesop Fable of The Ant & the Grasshopper upside down by announcing a LORA deadline extension on December 8th.

Aesop’s Fable told the story of a lazy grasshopper playing all summer long and making fun of an ant hard at work storing food for the winter. When winter comes, the starving grasshopper begs the ant for some food.

If you were a Michigan loan originator (Ant) that took the original LORA legislation seriously and signed up for the required testing ASAP, you just got the rug pulled out from under you. All those LO’s that procrastinated (Grasshoppers), or didn’t even know about the new legislation, get to laugh at you now for stressing out, studying and taking the test at 8am on a Sunday morning.

For those scratching their heads as to what I’m writing about, the Michigan legislature passed a bill, called the Loan Officer Registration Act (LORA), that Governor Granholm signed into law April 3, 2008. LORA requires Michigan loan originators to register with the Office of Financial Services (OFIR), requires taking a 24 hour class or having 4.5 years of experience, passing a test, annual continuing education, background check and fingerprinting.

The original deadline for all this was January 1, 2009.

A disagreement arose though, with the Michigan State Police concerning interpretation of the fingerprinting and background check requirements. This resulted in the extension announced December 8th pushing the deadline back to April 1, 2009.

The only good thing about the extension was that the legislature took the opportunity to stiffen the requirements a bit more. The FBI will also now be involved in the background check and fingerprinting.

I’ve written before that LORA is way over due. Too many crooks and incompetents got in the mortgage business for the fast cash and took advantage of unsuspecting homeowners, helping to contribute to the current housing crisis. The industry needs a housecleaning! When similar legislation was enacted in Indiana & Ohio, over 30% of the mortgage originators “disappeared”. More need to go. Just this past week, I met a guy who has his own mortgage brokerage and he didn’t even know about LORA. How scary is it, that he could be doing mortgages and not know about state requirements concerning his livelihood?

Overall, the extension is really a shame. All the bad eggs we want out of the business get more time to do more damage. Is it just a coincidence that the new deadline coincides with April Fools Day?

Show your support for higher standards in the mortgage industry by only doing business with those that have already passed the required LORA test. Don’t settle for a verbal verification of this. After taking the test, we all immediately get a printout with our picture on it that tells us if we passed or failed.