NAMB plans another appeal to LO comp rule
The Federal Reserve loan officer compensation rule went into effect on Wednesday when an appellate court dissolved an appeal, but the National Association of Mortgage Brokers said the fight isn't over. "Although the Appellate Court has ruled to lift the stay, this fight is far from over," said NAMB President Mike D’Alonzo. "NAMB will exercise every option available to combat the consumer damaging Fed Rule." Appellate Judges Karen Henderson, David Tatel and Brett Kavanaugh of the U.S. Court of Appeals for the District of Columbia reviewed the case made by NAMB and the National Association of Independent Housing Professionals, and lifted the stay on the rule Tuesday night. NAMB is currently meeting with its attorneys to discuss the next steps in the process, including another possible appeal to the enforcement of the rule. To crack down on the practice of paying originators more when a borrower accepts a higher interest rate mortgage, known as the yield spread premium, the Fed was charged with making a new, overarching rule governing how these officers are paid under the Dodd-Frank Act. The rule was written to prevent borrowers from being steered into higher-cost mortgage products than the lender requires. The rule also ends of the practice of mortgage originators receiving payments directly from the borrower and the lender simultaneously. Most lenders and their brokers were prepared to comply with the new rules on April 1, when it was originally set to take effect. NAMB and NAIHP both made the argument that the new rule will drive up costs for consumers. Consumer groups argued that much of the blame for the housing bubble and its collapse was due to the confusing and misleading nature mortgage documents. To go with this rule, the Consumer Financial Protection Bureau, which will open its doors in July, is at work combining the Truth in Lending Act and Real Estate Settlement Procedures Act forms. The appellate court ruled that NAMB and NAIHP did not meet the "stringent standards required for a stay pending appeal," but D'Alonzo vowed to do so. "NAMB will continue to fight for its members, our industry, and ultimately, the consumer," D'Alonzo said. Write to Jon Prior. Follow him on Twitter @JonAPrior.