I agree with your post. If we do not find a way to self-regulate, the government will do it for us. However, I'm afraid wind of change is already blowing in that direction with the current political climate. Although I wish it was, I'm not sure that our industry is currently equipped for self-regulation.

Teaching the NMLS courses on federal regulations and ethics here in Arizona has been an eye-opening experience for me. There is a great divide between the perspective of the advocacy groups and that of most mortgage professionals — especially when considering the need for financial (compensation) disclosure and YSP. This is why we are seeing the dramatic revisions to RESPA (new GFE) and TILA (potential flat-fee compensation).

As you're aware, the biggest problem revolves around the fact that we work in an extremely fragmented industry. We are regulated by multiple agencies on the federal and state level and there is a history of inter-agency contention and competition for control and staying-power. We are employed by large national banks, independent bankERs, or mortgage brokers who compete against each other for market share and typically do not share common goals. We do not have strong professional organizations (compared to REALTORS or CPA's for example) that support and lead us. Lastly, the historically low barrier to entry into our profession has allowed for the in-and-outflow of individuals who simply do not belong in a position that requires a high level of professional care.

Ideally, we could self-regulate and our industry could operate under a strict code of ethics that sustains current regulation and is controlled by the application of judicial precedent.

Personally, I like the Code of Ethics that is pledged by the National Association of Mortgage Brokers that includes:

Honesty and Integrity
Professional Conduct
Honesty in Advertising
Confidentiality
Compliance with Law and
Disclosure of Financial Interest

In order for our industry to self-regulate and adhere to a code of ethics, the code of ethics has to break the barriers between federally chartered banks, mortgage bankers and mortgage brokers. I hope your grass-roots efforts at the Mortgage Revolutions can lay the proper foundation.