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ANCHORAGE - Turmoil at a mortgage firm in Anchorage shows Alaska needs to start regulating the mortgaging industry, state officials and industry representatives said.
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Mortgage loan officers are not licensed in Alaska and do not have to undergo any government background or security checks, said Kevin Breeland, president of the Alaska Mortgage Bankers Association. Anyone can call themselves a mortgage lender in Alaska, which is the only state that does not regulate the home finance industry.
"In this industry, where a person is buying the biggest asset they'll ever own in their life, to entrust that to someone who hasn't gone through a bonding (or licensing) process, it's scary," Breeland said.
Officials say they field dozens of complaints a month from consumers.
"It's a problem," said Jennifer Payne, spokeswoman for the state Commerce Department. "There's no regulation."
Seven employees at Countrywide, including the branch manager, were fired last month after an internal audit turned up numerous irregularities.
Countrywide, which describes itself as the nation's largest independent mortgage lender, says it will not disclose what the audit revealed.
The former branch manager, Kourosh Partow, had his license revoked in Wisconsin four years ago for forging loan documents, according to public records.
Partow this week said he voluntarily left Countrywide to work at another firm.
State Sen. Tom Wagoner, R-Kenai, tried to get the Legislature this year to grant the Alaska Division of Banking and Securities authority to license and regulate companies that offer home mortgage lending.
SB 272 would have allowed state regulators to investigate the 20-plus complaints and more than 50 phone calls they receive weekly about questionable lending practices, Wagoner said in his sponsor statement.
As it is, they can do nothing to help Alaska consumers who feel they are being duped, Wagoner said.
The bill, which would regulate mortgage companies but not individual loan officers, passed the Senate on a 19-1 vote but stalled in the House. Wagoner plans to reintroduce it next year.
"This effort to establish accountability in the mortgage lending industry in Alaska is vital and past due," Wagoner said.
Most people in the mortgage industry support the bill, but not the renegades, he said.
"There are some people who don't like it: the cowboys of the industry who want to go out and do what they want to do," Wagoner said.
Information from: Anchorage Daily News, http://www.adn.com