FOR IMMEDIATE RELEASE
AUGUST 30, 2011
Contact:
Eric C. Peck
NMP Media Corp.
(516) 409-5555, ext. 312
NAMB feels lifting of LO compensation rule will boost mortgage related jobs and stimulate the economy through less overreaching lending regulations
AUGUST 30, 2011—As the federal government continues to seek new ways to create jobs and reduce burdensome regulation, the Association of Mortgage Professionals (NAMB) recommends that the Administration and Congress encourage the Consumer Financial Protection Bureau (CFPB) to rescind its loan originator (LO) compensation rule. Ever since the early April implementation of the Federal Reserve Board’s (FRB) Regulation Z; Docket No. R-1366, Truth-in-Lending on steering and LO compensation, consumers have experienced a dramatic increase in costs on their mortgages, in addition, the expenses have increased for all mortgage companies and a great impediment has been placed on the vital service of mortgage lending throughout local communities.
“Over the past three years, more than six different federal agencies have implemented new regulations and rules to try to help regulate and protect the consumer against unethical lending practices,” said Michael J. D’Alonzo, president of NAMB. “This has resulted in a further drain on our economy through overlapping and overreaching regulations.”
According to NAMB, regulations placed on the mortgage industry by the Federal Reserve and other regulatory bodies has resulted in good people being denied loans, in addition to the burden of increased consumer costs and a drastic reduction in the base of local mortgage professionals nationwide who provide homeownership opportunities in their local markets.
“When you take away consumer choice, you take away what has made this country great which is healthy competition,” said D’Alonzo. “This regulation, in essence, has established fixed pricing in the mortgage industry causing pricing to go up.”
As with many new regulations coming out of Washington, the new rules and regulations out of Dodd-Frank are overreaching and have slowed down the housing recovery and job creation, as housing remains the backbone of the national economy.
“Instead of really determining the root cause of the mortgage crisis, like loan type, Washington instead has issued new rules and regulations at individuals, rather than tackle the loan type scenario,” said Mike Anderson, vice president and Government Affairs Committee chair of NAMB. “Like the example NAMB used in its testimony before Congress on July 13, 2011, ‘Did the lawmakers legislate, regulate and impose stricter guidelines on pharmacists, doctors or drug stores after the discovery of harmful prescription drugs like Vioxx?’ No, they did not … they simply pulled the product from the shelf. It was loan type that caused the mortgage crisis. By no means is NAMB advocating going back to the days of reckless and irresponsible lending practices; however, with credit overlays, laws and new regulations, the housing recovery is extremely slow to any substantial recovery. LO compensation has caused hundreds and hundreds of small business to shut their doors and countless layoffs of support personnel in the mortgage industry.”
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The National Association of Mortgage Professionals (NAMB)—The Association of Mortgage Professionals, is a trade association of mortgage professionals with membership in all 50 states and the District of Columbia. NAMB provides education, certification and government affairs representation for the mortgage industry. For more information, visit NAMB.org.
Once again the government seems to have thrown the “baby out with the bath water” in trying to correct the flaws in the housing sector. Let’s hope they “get it” and back off some of these overreaching regulations so business can grow instead of stagnate.
Mitzi Anthony is the Marketing Rep for Choice Title, Inc., you can respond here or contact her directly mitzi@choicetitle.com.
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Her weekly blog can be found here.
