Now is the time to be proactive. You can be a part of a movement for legislation that enforces what the industry needs: stricter education for new originators and registration standards. Speaking up on the consumer-protection laws already in place can help, as well.

By joining other brokers in local and national organizations and voicing your opinions to Congress, you may find that your message has a powerful effect.

Important legislation

Legislators say more rules are needed to help regain consumers' confidence. Many of the proposed changes, however, might not be needed -- and could hurt brokers. But other areas could be positive.

Bills requiring mandatory state licensing and education requirements, for instance -- along with a national registry of loan originators, as House resolution No. 3915 has proposed -- are a good start. These may ensure that originators receive a minimum amount of education and could set important requirements for law and ethics education.

Legislation may also require registered loan officers to tag all their loan documents with their license numbers. A national registry also could help cut down on fraud and prevent bad actors from changing states.

Education and testing will most likely be handled on a state level, and it may take some states time to get the budget and staff in place to handle new requirements. But once these tasks are complete, we may see industry improvements.

Need for enforcement

The mortgage industry could also benefit from stronger enforcement of laws already in place. The first step is addressing staffing needs at agencies governing the mortgage industry so they can oversee the size of the market and get a handle on fraud. They also need the resources to help identify companies violating federal laws.

The Real Estate Settlement Procedures Act, the Truth in Lending Act and the False Identification Crime Control Act of 1982 already cover many of the violations consumers have complained about during the current residential crisis. These include payment-scenario disclosures and income misrepresentation on loan applications.

Being proactive

Industry associations can play an important role in pushing for or against broker-related legislation. If your company cannot afford to send its own lobbyist to Washington, D.C., consider joining an association.

Two options are the Mortgage Bankers Association of America (mortgagebankers.org) and the National Association of Mortgage Brokers (namb.org). Choose an association that shares your views and has state- or federal-level lobbyists, or both. Associations can help and have helped mortgage professionals form a united voice. For example, when the original version of HR 3915 threatened to do away with yield-spread premiums in committee this past fall, association lobbyists successfully pushed to change the bill's final draft.

Joining an association also gives you a chance to be proactive about stopping legislation from hurting the industry and the consumer, as opposed to simply reacting.

Mortgage professionals who understand the business are in the best position to determine what legal improvements are needed. It is much easier to work to create these needed changes through mortgage-industry associations, where brokers can join together and be heard.

The time to act is now and not when the legislation process for new laws is complete.