ANDERSON — Darrell Baylor, owner of Baylor and Associates, Anderson, is requesting a hearing with the Indiana secretary of state.

“I’m already fingerprinted down there,” he said. “I don’t need to go through this again.”

Baylor is referring to the new state law that took effect Wednesday aimed at raising the standards of the mortgage industry in a state with one of the nation’s highest foreclosure rates.

Nearly 40 percent of Indiana’s mortgage brokerages lost their licenses Wednesday because they haven’t complied with a new law aimed at raising the standards of the industry in a state with one of the nation’s highest foreclosure rates.

Including Baylor, there are five mortgage companies in Madison County that failed to meet state requirements. The other four are Horizon Mortgage Services Inc., Elwood; Omni Mortgage Co. Inc., Anderson; Prime Rate Lending Inc., Anderson; and Home Star Mortgage Services, Elwood.

As of noon Wednesday, 361 of Indiana’s 950 brokerages had failed to meet a Tuesday deadline for complying with a 2007 industry-backed law that requires each brokerage to name a principal broker with at least three years experience who has passed a state exam and will oversee his company’s business affairs.

Another 143 brokerages have voluntarily surrendered their licenses, Indiana Secretary of State Todd Rokita said in a teleconference with reporters.

That means only about half of the 950 mortgage brokers licensed by the state on July 1 remain in business five weeks later.

Baylor said the new state law is set up to get rid of small businesses.

“This will favor the big lenders,” he said.

The law was set up a year ago at the first sign of the mortgage and foreclosure crisis that has rocked the nation.

Baylor claims that it’s not the mortgage brokers who caused the problems but the big lenders.

“This is Rokita’s way to silence complaints about lending brokers.”

He said it will be a boon to the big banks who will reap the business that small brokerages won’t be able to supply.

But Osborne Morgan, regional president of STAR Financial Bank, Anderson, isn’t sure about that.