THE HISTORY
OF THE
MORTGAGE
ASSOCIATION
The Florida Association of
Mortgage Brokers is the oldest mortgage
brokerage association in the United States.
Incorporating on July 7, 1960, FAMB held its
first convention in Winter Park, Florida.
Winter Haven, Mayor L. W. Dunson, welcomed the
brokers and the first day was devoted to
organizational activities and discussions
focused on the role of education in the mortgage
business. Day two, the business meeting was
conducted for the purposes of electing
officers. Mr. J. W. Housefield was elected as
FAMB’s first President serving his term during
1960/1961. The Association has remained viable
and has played an important part in the
legislative process both statewide and
nationally.
The Florida Association of Mortgage
Brokers founded the National Association of
Mortgage Brokers in 1973. NAMB staged it first
national convention in Atlanta in 1975. The
majority of the attendees were Floridians.
Walter Smith, one of FAMB’s past presidents,
became the first president of the National
Association. In 1983 John Yessayan (1983
president) , Don Roberts (1984) and Herman (HY)
Weisser (1983) took the national association to
Washington, DC. FAMB provided the seed money to
help establish the presence needed in DC.
FAMB now has over 4,000 members and the
National Association of Mortgage Brokers has
over 20,000 members with membership throughout
the US.
Left to right – Walter Falk, Leo Nagle, Lt.
Governor Ray Osborne and Gerald Simon –
Convention at St. Petersburg – 1969.
In 1990 members of FAMB were appointed by
Comptroller Gerald Lewis to serve on the Sunset
Task Force covering the re-write of FS494.
Between 1988 and 1989 members of the Executive
Committee, the MBA of Florida and the Department
also worked with a facilitator discussing the
manner in which the statute could be
re-written. The 1990 version of the Florida
Mortgage Brokerage and Lending Act has since
become a model for many states.
After the passage of FS494 members of the
FAMB were appointed by then Comptroller Robert
Milligan to serve on the 1995 task force review
of the statute. FAMB has played an important
role in educating the brokers. Members were
appointed to serve on the state review
committee for restructuring the pre-licensure
exam. In 2001 FAMB was instrumental in
requesting the legislature to institute
continuing education for brokers and
originators. Our state was one of the first to
require CE credits for license renewal and since
then over 50% of the states require education.
We formed the FAMB Education Foundation, which
now provides free chapter classroom education
throughout Florida. The Foundation also
oversees the faculty and education programs of
the association.
Members of the Government Affairs
Committee and Executive Committee have testified
before Congress during the national reform of
RESPA and TILA in 1992-1994. Our members have
consistently monitored mortgage laws. Had it
not been for their involvement, far-reaching
laws could have stifled the mortgage business in
Florida. FAMB served on a coalition to write
the Florida Fair Lending Act. Unlike many other
states that passed very onerous predatory laws,
the Florida law was structured utilizing the
same triggers as Federal Law, thus lenders
remained viable in our state.
During 2007 several changes occurred in
Florida’s Crimes and Fraudulent Practices
Statute as well as FS494. Working with the
legislature, we were able to provide additional
consumer disclosure protection in FS494. The
changes will enable consumers to better
understand the mortgage process. We supported
the changes to the Fraudulent Practices
Statute. These changes make it a felony for
schemers to fraudulently mortgage and sell real
properties.
Our work is never ending. Your
association is constantly looking for ways to
protect brokers legislatively and to enhance the
benefits we provide as an association.
A SHORT
HISTORY ON THE
MARKET
AND THE EVOLUTION OF
MORTGAGE
BROKERS
The Florida
Association of Mortgage Brokers was officially
incorporated July 7, 1960. Let’s review the
evolution of mortgage brokering in Florida and
the United States.
Several private mortgage companies were
established in Florida during the 1940s. At
that time banks and savings and loan
associations dominated the first mortgage
market. Small loan companies were one source
for persons with did not qualify for a bank
loan, but their loan limits were extremely low.
Private lenders made first and second mortgages
for persons who did not meet bank criteria.
This business thrived. As the market evolved,
so did the need for legislation. The Southern
Mortgage Association was started by a few
Miami-Fort Lauderdale companies and another
mortgage group was organized in the Jacksonville
area. Both organizations merged and worked with
the legislature to create the first mortgage
brokering act written in the United States. The
act was created during the 1959-1960 legislative
sessions and the Florida Mortgage Brokerage Act
went into effect October 1, 1960. The next
state to organize was Arizona in 1972.
Florida’s mortgage brokering act
originally was based on the private lending
market. The current law refers to private
investors as non-institutional investors.
Although they play a smaller part in today’s
overall loan production, the non-institutional
investor fills the void when the sub-prime
market will not fund mortgages to persons who
have credit problems.
The late ‘60s and early ‘70s evidenced an
age of national reform. The Equal Credit
Opportunity Act, the Truth in Lending Act and
the Real Estate Settlement Procedures Act all
came to fruition. Government sponsored
enterprises, created by Congress in the early
70s, were authorized to invest in mortgages and
funds were raised through the sale of mortgage
backed securities. Prior to that time the
Government National Mortgage Association, who
administered the FHA programs were one of the
major sources of mortgage funding.
Second mortgages became more prominent in
the early ‘70s. During this time Florida’s
Legislature changed finance company regulation.
This allowed Florida’s Finance Companies to make
mortgages up to $2,500. Around this same time
banks created the first “home equity loans”
commonly called HELOC’s. Prior to that time
second mortgages were rarely an investment that
banks and S & Ls participated in. It was during
this period that we saw the largest expansion in
the mortgage market. The Federal Home Loan
Board (Freddie Mac) and the Federal National
Mortgage Association (Fannie Mae) became
important players in the market during the early
‘80s by opening up the availability of funds
through the conforming loan underwriting. The
Mortgage Insurance companies also evolved and
played an important role in insuring the
mortgages that were delivered to the secondary
market. Mortgage Brokers became the conduit for
delivery of conforming loans to mortgage
bankers, who then delivered the loans to the
GSEs. Banks no longer needed a retail presence
in every city. Today, Mortgage Brokers deliver
over 60% of the mortgage loans created in the
United States.
The sub-prime market became prevalent in
the 1990s by serving the niche between
conforming and the non-institutional investor
loan. This market has played in important role
in creating homeownership for people who did not
meet the conforming loan criteria.
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