Posted by: S-Crow

"S-Crow" (Tim Kane) is co-owner (with spouse Lynlee, LPO-Designated escrow Officer) of Legacy Escrow Service, Inc., an authentic independent escrow firm closing residential purchase/sale and refinance transactions.

25 responses to “Industry Extreme Makeover”

  1. Puget Sounder

    +1 on the 4-year college degree requirement.

    Rate this comment: Thumb up 0

  2. Tai

    Outrageous, just like how escrow agent isn’t required to have such stipulation.

    LOs and RE salesman are required to practice under a “broker” who do need to go through these requirement, just like how escrow ownership have such requirement. You as an escrow agent should know better than saying something ridiculous like this.

    Rate this comment: Thumb up 0

  3. S Crow

    Tai-

    Thanks for the comments. I’m trying to understand your comment, but am having difficulty.

    Rate this comment: Thumb up 0

  4. SeattleMoose

    “The industry needs an extreme makeover.”

    I would take EXTREME one step further….

    If the loan officer’s job deals with repetitive paperwork/processes I would venture that this sort of “paper shuffling job” could be automated/digitized and therefore eliminated altogether.

    This would help remove concerns involving training/ethics/morals from the equation.

    To a computer, you either meet the criteria to obtain the loan, or not. There is no sizing up of a “sucker” or under the table deals to relatives, etc.

    Computers are certainly corruptible via data/programming, but they are less so than human beings. And the “training” variable in the equation is eliminated. And the transaction details can be sent directly to government verification agencies (yet another computer) to ensure all comply with the same set of rules. As it is today each branch office can do its work “out of sight” and “in the dark”….hence you have dead people getting loans, pets. etc.

    I would not advise anyone to go into a “profession” that may soon go the way of the “telephone operator”.

    Rate this comment: Thumb up 0

  5. stephen

    I think your trying to make it something it’s not. It’s not a professional career, it’s a career. Why do we have to put it out of reach of many folks that want to do it for no particular reason.

    I carried a license for a while in my twenties and my niece and nephew both are RE agents. There is nothing wrong with being a salesman. The problem is that when folks start getting carried away and comparing themselves to attorney’s and talking about giving advise without a license (anyone can give RE advice and it’s perfectly legal) then they hold themselves up to ridicule. We don’t have an agent problem. We do have a problem, but they are not it.

    The system is broken and the people, who are money driven by the industry, are just operating within that system.

    Rate this comment: Thumb up 0

  6. RottedOak

    Whenever you see a proposal to require a “4-year college degree” for something, ask yourself: What relevance does a degree in music, Russian literature, chemistry, etc., have for this job? Because such a requirement proposes that someone with no degree but 20 years experience in the field is not qualified for it, but someone who has one of the degrees I mentioned is.

    Background and credit checks have some relevance to work involving large money transactions, because of the high risk for fraud. But layers of “education” requirements don’t stop fraudulent operators, who will either meet the criteria or cheat their way past them. These types of rules primarily serve to restrict competition for industry jobs, which is why people in the industry are often their biggest cheerleaders.

    Rate this comment: Thumb up 0

  7. ab

    Seems to me the biggest corruption in the country lately has come from over educated people. Enron, Homestore, and many other companies. A college education doesn’t make someone ethical you are born with it or not. In my experience the larger companies require far more ethics training and more education above the state requirement.

    I am not a Real Estate agent just a researcher in the industry. I have great respect for many agents and have lost all respect for others. I will say that my agent has found me some outstanding properties over the years and without her I would probably would never have had the opportunity to purchase them.

    Rate this comment: Thumb up 0

  8. S Crow

    Excellent feedback. And very persuasive. There are systemic problems. I do think there are measurable differences between those that have an educational foundation and those that do not, regardless of degree earned.

    Many conversations with clients seem to center on what the consumer pays for value received. Had a conversation with a nurse (with masters) at Everett Providence Colby campus who was troubled that she was paying out thousands in commissions to agents involved with her transaction. The nurse, with years of post grad work and continual education in health care management, indicated that the payout was nearly a third of her entire years worth of salary.

    The question remains: is is sufficient for public good and trust to have people working in the business with GED’s or HS education, with little to no backround checks (until recently) and NO CREDIT checks as salespersons or loan originators (I’m not talking about brokers who have different guidelines).

    I suggested credit checks because as an escrow company, we had to do that in addition to background checks. I think it would do public good to build trust, knowing that at minimum, you are not dealing with felons or individuals that have credit issues.

    Rate this comment: Thumb up 0

  9. Pegasus

    You should run for a US Senator position. Then you can take contributions and special favors from the wealthy and the corporate world and do nothing about the fraud taking place. Just take care of your friends so they continue to operate.

    Requiring a four year college degree and credit checks is ridiculous. There are many hugely successful people is this country that don’t even have a high school education.

    The solution is simple. Start enforcing the rules and laws that are already in place and send the crooks to jail after they give the money back.

    Requiring individuals to pass competency exams and background checks that prove they are not criminals would be appropriate but that will not solve the problems.

    The problems stem from the top in government and the corporate structure. They all know what is going on but with a nudge and a wink they have allowed it to occur.

    You now have Senators asking hard questions about the sub-prime market. Where the hell were they in the past five years? They all knew what was going on. They waited until it is collapsing out of control and now they make a lot of noise and do a few token responses while the stolen funds will never be returned unless paid by the taxpayers as happened in the S & L crisis a few years back.

    Take a look at the situation that occurred in this state that was about predatory lending by HFC. Our Governor then Attorney General did nothing to stop these practices until other states forced a settlement from HFC and she joined in receiving only tokens of the losses to be returned. Prolly cause her former boss was a lobbyist for HFC. Hmmmmmm.

    HFC was purchased in an emergency buyout(bailout) and now they are writing off ten BILLION of these loans years later. History and crooks never change.

    Rate this comment: Thumb up 0

  10. Matt

    The problem here is that you have no way to determine WHY the derogs on the report. Yes, I know that there is no excuse, etc.. etc.. however, if someone has immaculate credit their entire life, but got fired, no COBRA, no health insurance for 2 weeks and then a major accident, and 100k+ of medical bills, that caused them to BK, you cannot judge that person strictly off of the BK.

    If they provide the doc’s, and have established themselves since, and did not charge off everything, there has GOT to be a subjective body looking at the situation.

    Or the single woman whose husband left her after she has been taking care of the kids for 18 years and only paying job in the last 2 decades has been part time. He leaves her with a ton of debt, and HE BK’s, but they were married so she’s left with the burden, now she has no choice, so she BK’s.

    There ARE (though not many) scenarios where a sound judgement of character is needed.

    That being said, you can’t put a sales job on the same level as a Dr, CPA, JD, etc…and require a degree.
    There needs to be more of a standardized way to measure the loan officer. My girlfriend had to do 1600 hours to cut hair, and has to pass a state board exam to work in the field. Bartenders in many states have to pass a drug/background check to pour liquor.

    Make giving professional advice (getting paid) or originating a loan on real property pass a similar ethics committee exam, as well as a knowledge exam, as well as further education.

    whew.

    Rate this comment: Thumb up 0

  11. Matt

    Seattlemoose Said:

    To a computer, you either meet the criteria to obtain the loan, or not. There is no sizing up of a “sucker” or under the table deals to relatives, etc.
    ___________________________________
    The first part of my post was geared towards this comment, about only computer criteria, which there is a lot of auto approvals, but also auto TD’s.

    Rate this comment: Thumb up 0

  12. S Crow

    Matt & Pegasus-

    you speaketh the truth.

    So from your perspective the higher education benchmark would do little to improve public perception of the real estate industry? I agree that you have cases where even those with higher education can be corrupt, but corruptness,fraud and increasing the professional image are separate issues. No?

    Rate this comment: Thumb up 0

  13. Pegasus

    s crow- Higher education can improve the “perception” of the real estate industry. Everyone can become a doctor of dirt with a diploma hanging on the wall. It won’t remove the fraud maybe just make smarter crooks.

    Credit checks will just become another way to prey upon the underprivileged. They are already being charged twice as much for the same coverage by their insurance companies. Their credit scores make home ownership even more difficult. Not everyone with low credit scores is financially irresponsible. Denying them a job will just make it impossible to break out of their financial situation. It does not prove they are crooks just because of their credit score.

    The industry already knows who the crooks are. Kicking the down-trodden will not stop the fraud. It will only serve to keep the have-not’s in place while they are fleeced.

    Rate this comment: Thumb up 0

  14. Erik

    I’d like to see them take an survey course in economics even if a degree isn’t required.

    Then again, I’d also like to see some coverage of economics in our high school system. I’m probably biased, but I’m not sure how we can expect our schools to prepare today’s youth to vote or make personal financial decisions without any preparation in this area.

    Rate this comment: Thumb up 0

  15. witzend

    Yes, I think that there are always exceptions, and that all relevent decisions for granting licenses cannot be made by a computer.

    I do think that required education/training is a step in the right direction though.

    but not just a college degree. Rather, a shorter program with a very focused curriculum (no GE requirement, etc.)

    And I think this is what the current RE programs aim at (but are they intensive enough?). For example, this cirriculum for licensing in Utah I found randomly on the internet.

    http://realestate.utah.gov/education/90hr_cir.pdf

    If such a cirriculum could be somewhat intensified, and require a rigorous testing process to prove competence – the incentive of the education provider to make profit (or further profit), should not be allowed to interfere with the testing standards)

    Main thing is, I believe, RE agents should have enough of an education so that if they are, in the future (with a possibly changing legal environment coming) partly responsible for allowing (and encouraging) a home buyer to take on “suicide loans” etc., they cannot claim “ignorance”. They are after all, the folks who do the selling, i.e “encouraging”

    Rate this comment: Thumb up 0

  16. witzend

    Let me try the link again,

    http://realestate.utah.gov/education/90hr_cir.pdf

    Rate this comment: Thumb up 0

  17. S Crow

    Tai-

    Thanks for coming back. I think you make a good point in that brokers are responsible for their LO’s and Agents. Unfortunately, with the amount of problems and fraud going on , I think that there is apathy and complicity in the real estate machine.

    I still firmly believe that loan originators and agents should have had to undergo full background checks and credit checks a long time ago. Obviously there should be checks and balances, but we just cannot have people who are felons or have their financial lives in a mess working in the business. I wouldn’t want to do business with someone who has the pressure of earning a commission so pronounced that it clouds the judgment in representing their clients best interests. IMO it just opens the doors for people doing unethical or fraudulent things. We are only in the 1st or 2nd inning of understanding the gravity of the fraud occuring over the last three to four years in the lending world.

    Rate this comment: Thumb up 0

  18. witty

    How much fraud is in the escrow industry? Seems like whenever you hear of mortgage fraud, there’s more than one player…including escrow.

    Rate this comment: Thumb up 0

  19. S Crow

    True, but not nearly on the scale in sheer numbers than in lending.

    Some of the fraud you refer to is in title/escrow agent combination shops.

    This is where an title/escrow shop has players involved in doing serious fraud as part of an organized ring;such as an appraiser, realtor and closing agent all part of the deal. You have to have mutual cooperation for some of this to unfold.

    Rate this comment: Thumb up 0

  20. witty

    Well, there are more loan originators than escrow officers, so mathetically, this would be the case.

    One of the former heads of the local escrow assc. Ted Grimes, who was independent, went down big time for spending $$ that was not his.

    Rate this comment: Thumb up 0

  21. witty

    I believe another escrow company recently shut down (Action Escrow?)…independent… for fraud that involved duplicate HUDs for a lender.

    Rate this comment: Thumb up 0

  22. Jillayne

    Hi All,

    I have co-authored articles about this problem for YEARS now.

    In answer to the observation of just enforcing the existing laws, our government has limited resources. They go after the really, really bad cases. They don’t have enough money to go after the small cases, which is why we continue to see problems nationwide, not just here in Seattle.

    One solution (I’m not saying I have THE magic answer) is for the industry to enact self-regulation. If they don’t start doing that, they’ll end up facing harsh government regulations, and higher government fees to regulate them. I’ve been invited to WaDC this year to testify to this end.

    I advocate all comments in regards to increasing minimum levels of education, especially the comments about taking a course in economics.

    You have no idea what I’ve seen in the classroom….I could tell stories.

    Rate this comment: Thumb up 0

  23. witty

    Sorry, I’m having problem with this line…”Um, how about including credit checks, like required of escrow ownership”

    Owners of Mortgage Brokerages go through extensive background and credit checks.

    Do closers need credit checks if they do not have ownership interest in the Escrow Company?

    Also, Licensing only applies to mortgage brokers, not loan orignators who work for banks like Countrywide, Wells Fargo, Washington Mutual and also not loan originators who work for consumer loan companies (some of the highest interest rates you will care to find).

    Rate this comment: Thumb up 0

  24. shane

    Becoming an LO is far too easy. I am a mortgage underwriter. Just today I was told by an “experienced broker” that there borrowers mortgage was not in defualt, they just missed the last 4 payments! Unfortunately, statements like that are common enough it barely surprised me.

    Rate this comment: Thumb up 0

  25. witty

    How easy is it to become an underwriter, Shane? I don’t know, but please inform me…what did you have to do to become an underwriter? Background checks? Credit reports? College Degrees?
    I’d love to know.

    Rate this comment: Thumb up 0

Leave a Reply

Do you want a nifty avatar picture next to your name, instead of a photograph of Tim's dog? Just sign up with Gravatar, and make sure to use the same email address in the form below. It's that easy!

Sorry, you have already posted the limit of 5 comments on this post.

Archives

Find us on Google+