Lawmakers, industry object to merging mortgage and finance divisions
awmakers on Friday questioned the wisdom of the governor’s plan to merge the Financial Institutions and Mortgage Lending divisions when Nevada has the nation’s worst foreclosure rate.
“I’m not a fan of this proposal to save some $266,000, which is the price of an average home,” said Assemblyman Marcus Conklin, D-Las Vegas.
He said there are constantly “new things” coming out, often promoted by unscrupulous businessmen and “more and more federal legislation that’s going to require more and more at the state level.”
“Too many Nevadans are becoming victims of mortgage lending schemes that hook people by telling them they can stay in their homes but really plunge them further into debt,” he said.
Mortgage Lending regulates mortgage brokers, mortgage bankers and escrow agents among others. Financial Institutions regulates banks, credit unions and other financial businesses.
Assemblyman Joe Hogan, D-Las Vegas, said the proposed merger is another example of what he described as “a disturbing pattern.”
“The problems are almost at their peak and suddenly, with no one determining that we no longer have these needs, we’re just arbitrarily cutting,” he told Financial Institutions Administrator George Burns.
“There has been a machete approach,” he said of Gov. Jim Gibbons’ proposed budget cuts.
Senate Majority Leader Steven Horsford, D-Las Vegas, asked whether the governor’s administration had reached out to those in the industry before proposing the merger.
Bill Uffelman, president of the Nevada Banker’s Association, said he was not contacted about the plan. He said the association opposes the merger.
“We pay fees,” he said. “We pay for what we get, and we want quality.”
“It’s almost like the cuts are being put forward in a vacuum,” said Conklin.
David Goldwater, a former assemblyman who is in the mortgage lending industry, said the Mortgage Advisory Commission, which he is a member of, also opposes the merger. Goldwater said he was one of those who helped create Mortgage Lending as a separate division in 2003 and that doing so helped improve regulation and reduce complaints dramatically.
Randy Robison, representing Nevada credit unions, said the merger would be detrimental to that industry as well.
Joe Waltuch, administrator of the Mortgage Lending Division, said his agency is doing much better at keeping tabs on the industry now. He said the major complaints now are about foreclosure consultants and mortgage modification companies. He said the attorney general has told him his control over those types of companies is very limited.
Conklin said he will work to fix that situation, bringing those companies under Waltuch’s control.
“We would love to have jurisdiction over them, to license and regulate those companies,” Waltuch said. “Give us the authority and we will be there.”
Conklin said reducing state oversight of the mortgage lending industry would put more Nevadans at risk of “falling prey” to scam artists.
The subcommittee took no action on the proposal.
– Contact reporter Geoff Dornan at firstname.lastname@example.org or 687-8750.