As director of the S.C. Department of Labor, Licensing and Regulation, I am proud of the many ways our agency has become more efficient and effective since restructuring brought together 38 boards and commissions into the department 16 years ago. That is why I was deeply troubled and perplexed when I read an article Oct. 3 in The Sun News ("Real estate watchdog loses bite") highly critical of the agency.
Reporter David Wren never contacted me or anyone in our agency to respond to allegations that the Real Estate Commission was no longer an effective watchdog for consumers.
The Real Estate Commission is one of a handful of boards that has asked the legislature to let it return to 1993 when they were independent of LLR, removing the direct oversight the public demands. It is important to note that at the time the Real Estate Commission became a part of LLR, it was under federal investigation for improper conduct.
The premise of the story was that the commission did not have enough authority or support to appropriately regulate the real estate industry. The further implication was that the commission was not doing enough to regulate mortgage fraud in this state.
First, the commission is independent of LLR in that it has sole authority as to who is disciplined and how severely. The story indicated that disciplinary action has not been harsh enough. The commission members can only blame themselves for that. In fact, the commission routinely ignores the recommendations of LLR attorneys who make the case for much tougher sanctions.
The commission has five qualified investigators and a chief investigator available to conduct real estate investigations. From Jan. 1 to 5 p.m. Oct. 4, the commission received 370 complaints. In that time, 364 cases have been closed, and we are very proud that our investigative unit is closing cases on a 1-to-1 ratio and challenge anyone to do better.
Concerns were expressed about our new licensing section that was set up to streamline the licensing process. Yes, just as with any new program, there have been bumps along the way, and we have addressed them. The program has allowed us to put in place new safeguards; for example, it now cross-checks licensees to make sure they have not been disciplined by another LLR board.
Wren reported inaccurately that cost-cutting measures have affected the commission's ability to do its job. No funds have been cut from the Real Estate Commission's budget. And because LLR has been a good steward of all licensee fees, we have not found it necessary to raise license fees since restructuring; with some boards, we have reduced license fees. The real estate association said it would support raising licensing fees if the commission could become a stand-alone board.
On the second issue, mortgage lenders are licensed by the S.C. Department of Consumer Affairs, not the Real Estate Commission or LLR. Consumer Affairs, in cooperation with the attorney general's office, investigates mortgage fraud allegations in the state. In fact, there is a toll-free number for reporting allegations, 1-800-553-7723. However, if the commission receives an allegation that a real estate licensee was involved in mortgage fraud, LLR would investigate that licensee.
Wren reports that LLR does not have time to do background checks on its licensees, so if licensees lie on their applications, LLR does not know it. The truth is that LLR and the commission lack the legal authority to do routine background checks. LLR fully supports background checks for all of its licensees and has attempted to get legislation passed so it could do background checks. However, the question is, would the Real Estate Commission use those reports to protect the public? The record shows that in the past, the commission has knowingly approved license applications for people convicted of serious crimes.
The Real Estate Commission exists solely to protect the public. Making the commission autonomous would not achieve that goal. The legislature could better protect the public by adding more public members to the commission, thereby reducing the number of real estate industry insiders who now serve. Or, let the Administrative Law Court hear disciplinary cases because that is what they are trained to do.
The writer is director of the S.C. Department of Labor, Licensing and Regulation.
Editor's note: Statistics quoted by Youmans contradict data that is available on the agency's web site and information the agency's staff has presented to the S.C. Real Estate Commission during meetings. Minutes of those meetings also show the commission has lost staff members to agency restructuring.