NAMB to decide on continuing LO comp rule lawsuit this week
The National Association of Mortgage Brokers will decide this week on whether to continue its lawsuit seeking to block the Federal Reserve rule governing how mortgage brokers are paid. The Fed rule, required under the Dodd-Frank Act, went into effect April 6 after a brief stay for the U.S. Court of Appeals for the District of Columbia to hear lawsuits brought by National Association of Independent Housing Professionals and NAMB to end the rule. The original lawsuits were filed in the U.S. District Court for the District of Columbia. The rule ends higher compensation for originators when a borrower accepts a higher interest rate mortgage, known as the yield spread premium. 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. The NAIHP dropped its lawsuit to pursue other strategies last week, but Mike Anderson, the director of government affairs at NAMB, said they are discussing strategy and cost with attorneys this week. "We have not dropped the lawsuit," Anderson told HousingWire Monday. "We'll have our final decision this Thursday." Write to Jon Prior. Follow him on Twitter @JonAPrior.