“People won’t flock necessarily to banks,” Morgan said. “Mortgage groups will become more aggressive in the market. Anyone who has the qualifications can do that.”

Morgan said the market for homes is soft and, as a result, little refinancing is going on. Consumers, he said, won’t suffer from having too few places to go. He added that if a refinancing boom was under way, the mortgage brokers would’ve gotten recertified. Brokers act as third parties that match a borrower to a lender. They originate about two-thirds of the home and commercial loans in Indiana, Rokita said.

Investigators from the state Securities Division will investigate to see if unlicensed loan brokers still were operating in the state. Rokita called on mortgage lenders to tip off investigators if they suspected an unlicensed loan broker was still in business. Unlicensed brokers could face criminal charges or civil penalties.

The Indiana Association of Mortgage Brokers worked with Rokita’s office and lawmakers in drafting the new law, said the group’s president, Mike Monaco of Merrillville.

“Make no mistake about it, we had one of the easiest entrance barriers in the country,” Monaco said. He said many of the brokers who have lost their licenses likely already had left the business because of the housing industry downturn.

The low standards likely were among the factors leading to Indiana consistently having one of the 10 highest foreclosure rates in the nation, Monaco said.

Meanwhile, Baylor said he will concentrate on other ventures in his office, such as insurance.

As for getting recertified, he said. “I’ll go back and take some classes, take the test.”

At least he’s answering his phone. A call to Horizon Services Mortgage Inc. in Elwood resulted in a message saying the phone was disconnected.

Reporter Brandi Watters and The Associated Press contributed to this story.

Madison County mortgage companies not in compliance with new Indiana law

• Baylor and Associates, Anderson