Following the mortgage meltdown in 2007, lenders came under federal scrutiny for their loose financing standards which helped start the housing free-fall.  As a result, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (or SAFE Act) was passed by Congress.  On October 1st, the final rules will take effect, including a mandatory registration for mortgage brokers.

According to MSNBC, fingerprinting and background checks will be a part of the registration along with mandatory education,

Industry sources say that thousands of brokers have gone through mandatory education, credit checks and state and federal testing in order to retain the right to handle mortgage originations.

The process has thinned the ranks of brokers, who may be even fewer soon given talk of a 30 percent fail rate on testing, said Bob Moulton, president of Americana Mortgage Group in Manhasset, New York.

While it may be bad news for many brokers, overall the consumer will gain from a more informed and educated lender.  If everyone else in the housing industry is accountable for their work, so too should be lenders.