NAMB Examines Federal Reserve Position on Originator Compensation

07/23/2009


7900 Westpark Drive, Suite T-309, McLean, VA 22102   (703) 342-5900   www.namb.org


                  For Immediate Release                                                                                  Contact: Jon Otto

 July 23, 2009                                                                                                        (703) 342-5851


NAMB Examines Federal Reserve Position on Originator Compensation
 

McLean, VA – July 23, 2009 – The National Association of Mortgage Brokers (NAMB) appreciates the comprehensive Federal Reserve Board (FRB) proposed rule making significant changes to Regulation Z of the Truth in Lending Act (TILA), and will be thoroughly analyzing it for further comment.  For years, NAMB has strongly advocated that consumers receive the same protections regardless of which origination channel they select to originate their loan.

“To focus on information the consumer needs to know about the product is the correct approach to consumer protection,” said NAMB President, Jim Pair, CMC.  “The same mortgage products are offered by mortgage brokers, lenders, banks and credit unions; all are market competitors acting in the capacity of a mortgage broker.  We look forward to working with the Federal Reserve Board to improve its proposed rule for the benefit of all consumers and to ensure that market participants are providing the same information to consumers.”

 

NAMB commends the FRB for recognizing that all competitors in the mortgage market receive indirect compensation inside the mortgage rate.  For too long, hidden payments known as ‘overages’ and ‘service release premiums’ paid by Wall Street to lenders have gone undisclosed to consumers.  The proposed rule goes a long way to ban these incentivizing payments to lenders.

 

NAMB calls for the Department of Housing and Urban Development (HUD) to immediately withdraw its final Real Estate Settlement and Procedures Act (RESPA) rule based on the actions taken by the FRB today.  Although NAMB agrees with the intentions of the final RESPA rule to simplify the mortgage process, the final rule, in its current form, will only lead to further harm for consumers rather than promote clarity in the mortgage process.  The FRB Chairman hinted to such a withdrawal when he called to merge TILA and RESPA disclosures.  In addition, Congress called for a withdrawal of the RESPA final rule for the same reasons when it passed H.R. 1728.

 

HUD has failed to properly examine the final rule's impact on consumers and small businesses,” stated Pair.  “It will put small business mortgage professionals at a significant competitive disadvantage, impeding competition in the mortgage industry and ultimately hurting consumers.

 

NAMB will continue to analyze the proposed FRB rule and prepare necessary comments for submission.

 

Federal Reserve Board Press Release

 
###

The National Association of Mortgage Brokers is the voice of the mortgage broker industry with members in all 50 states and the District of Columbia. NAMB provides education, certification and government affairs representation for the mortgage broker industry, which originates over 50% of all residential loans in the United States.

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NAMB - NAMB

NAMB Examines Federal Reserve Position on Originator Compensation

07/23/2009


7900 Westpark Drive, Suite T-309, McLean, VA 22102   (703) 342-5900   www.namb.org


                  For Immediate Release                                                                                  Contact: Jon Otto

 July 23, 2009                                                                                                        (703) 342-5851


NAMB Examines Federal Reserve Position on Originator Compensation
 

McLean, VA – July 23, 2009 – The National Association of Mortgage Brokers (NAMB) appreciates the comprehensive Federal Reserve Board (FRB) proposed rule making significant changes to Regulation Z of the Truth in Lending Act (TILA), and will be thoroughly analyzing it for further comment.  For years, NAMB has strongly advocated that consumers receive the same protections regardless of which origination channel they select to originate their loan.

“To focus on information the consumer needs to know about the product is the correct approach to consumer protection,” said NAMB President, Jim Pair, CMC.  “The same mortgage products are offered by mortgage brokers, lenders, banks and credit unions; all are market competitors acting in the capacity of a mortgage broker.  We look forward to working with the Federal Reserve Board to improve its proposed rule for the benefit of all consumers and to ensure that market participants are providing the same information to consumers.”

 

NAMB commends the FRB for recognizing that all competitors in the mortgage market receive indirect compensation inside the mortgage rate.  For too long, hidden payments known as ‘overages’ and ‘service release premiums’ paid by Wall Street to lenders have gone undisclosed to consumers.  The proposed rule goes a long way to ban these incentivizing payments to lenders.

 

NAMB calls for the Department of Housing and Urban Development (HUD) to immediately withdraw its final Real Estate Settlement and Procedures Act (RESPA) rule based on the actions taken by the FRB today.  Although NAMB agrees with the intentions of the final RESPA rule to simplify the mortgage process, the final rule, in its current form, will only lead to further harm for consumers rather than promote clarity in the mortgage process.  The FRB Chairman hinted to such a withdrawal when he called to merge TILA and RESPA disclosures.  In addition, Congress called for a withdrawal of the RESPA final rule for the same reasons when it passed H.R. 1728.

 

HUD has failed to properly examine the final rule's impact on consumers and small businesses,” stated Pair.  “It will put small business mortgage professionals at a significant competitive disadvantage, impeding competition in the mortgage industry and ultimately hurting consumers.

 

NAMB will continue to analyze the proposed FRB rule and prepare necessary comments for submission.

 

Federal Reserve Board Press Release

 
###

The National Association of Mortgage Brokers is the voice of the mortgage broker industry with members in all 50 states and the District of Columbia. NAMB provides education, certification and government affairs representation for the mortgage broker industry, which originates over 50% of all residential loans in the United States.

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Forgot Password?

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