Few would argue with the proposition that different licensing requirements are called for if a person is going to drive a school bus or an eighteen wheeler as opposed to your standard four-door sedan. What about real estate licenses? Does one size fit all, or should some special certification be required for those who are going to sell commercial buildings or engage in property management or concentrate on vacation rentals, etc.?

In California, all of those activities, as well as others, are covered by the same standard-issue license. Indeed, California is one of the few states in the country that permits mortgage loan brokerage to be conducted under the same license, with no extra certification, that covers everyday residential sales and rentals. (Of course mortgage activity can also be carried out by other entities, such as banks, whose authority comes from sources other than the Department of Real Estate.) But recent events have called this practice into question.

Not long ago -- and it really wasn't long ago -- when the market was hot, hot, hot, it became fairly common in California for mortgage loan brokers to act as sales agents, representing borrowers in the purchase of property. This caused more than a little consternation among those real estate licensees whose practice consisted entirely of representing buyers and sellers.

These agents were not only resentful of the potential business lost to mortgage brokers, but also they often rightfully complained that the loan agents typically didn't know what they were doing. Though licensed, they were basically unfamiliar with all the forms, disclosures, and procedures that need to be followed in a typical transaction.

More recently, concern has been expressed about the other side of the coin, so to speak. That is, it has been said that many of the loan debacles of the past few years can be blamed on loan brokerage being conducted by real estate licensees who really didn't know what they were doing or what kind of products they were offering.

In June of 2007 the California Association of Realtors® (CAR) created a task force whose charge was, among other things, to consider the plausibility of instituting a separate license for mortgage loan brokering that would be administered within the Department of Real Estate. Even at the time some CAR members were dubious about the mission of the task force. CAR has a long-standing tradition of being opposed to so-called "specialty licensing." Members have feared a slippery slope leading to requirements for specialty certification to be, say, a seller of condominiums, or apartments, or who knows what.

(It should be noted that, in opposing specialty licensing, neither CAR not its members are advocates of licensees working outside of their areas of competence. Indeed, the Realtor® Code of Ethics, to which CAR members subscribe, specifically provides at Article 11 that "Realtors® shall not undertake to provide specialized professional services concerning a type of property or service that is outside their field of competence…" )

At the recent June meetings of the CAR Board of Directors, the task force put forth a recommendation that "C.A.R. sponsor legislation to create a new mortgage loan broker/agent license program administered within DRE Department of Real Estate that is modeled after the real estate broker/salesperson license. The new license would be the exclusive authority to engage in mortgage loan origination, brokerage or servicing activity within the jurisdiction of DRE."

After considerable debate the proposal was voted down. So CAR will not be sponsoring such legislation. The status quo prevails. The issue, however, may not go away.