State audit: Lenders overdue for oversight

August 25, 2010|By Jamie Smith Hopkins, The Baltimore Sun

State auditors say Maryland's office of financial regulation has a backlog of mortgage firms overdue for examinations, a problem officials have been grappling with for years but believe will be fixed soon.

The office, part of the state Department of Labor, Licensing and Regulation, is required by law to put each mortgage lender, servicer and broker firm under the microscope once every three years to make sure no rules are being broken. More than 360 of the state's 2,090 licensed firms were overdue for a visit as of early November, some by years, legislative auditors said.

The routine audit was conducted last fall and made public Wednesday.

Sarah Bloom Raskin, who heads the office and has been tapped for a seat on the Federal Reserve, wrote in a response to auditors that the backlog was down to 63 in June and should be "effectively eliminated" by the end of the year. Staffers had nearly 1,400 overdue exams as recently as two years earlier, pushed upward by a law requiring that servicers be licensed as of 2005.

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