The impact of a 2008 law called the SAFE Mortgage Licensing Act is being felt in a growing portion of the country. The law regulates brokers and loan officers who take mortgage loan applications.
"The intent of the SAFE Act is to protect consumers from shark-infested waters," says Anthony Hsieh, CEO of LoanDepot in Irvine, Calif.
But some sharks are more equal than others. The SAFE Act treats loan officers differently, depending on the type of company for which they work.
Mortgage brokers -- and loan officers for mortgage banks that don't take deposits -- must pass state licensing tests. Many first-timers fail.
Loan officers for federally regulated depository institutions, such as banks and credit unions, don't have to take the tests. They merely need to register with federal authorities.
Findlay says, laughing, that when job applicants at LendingTree fail their state licensing exams, "we've given them guidance that the best place they can be employed is at a bank."
Hsieh says "there will be fewer sharks in the water" because of the SAFE Act. But he says there are better ways to stymie crooks, and worries there won't be enough licensed brokers to handle the next mortgage boom.