SAN JOSE, CA—Almost all of the activity regarding regulation and legislation of mortgage origination activity is happening on the federal front, members of the California Association of Mortgage Professionals said at their annual convention here.
Therefore, much of CAMP's emphasis has been on Washington, where it has engaged a lobbyist. The group is hoping Congress will pass three bills introduced by Rep. Gary Miller, R-Calif., that will tweak the Dodd-Frank Act. The organization's president-elect Fred Kreger told attendees at the group's annual convention here wholesale changes to the law are not possible because Rep. Barney Frank, D-Mass. opposes anything that would open it up “with a crowbar.”
Ed Craine, CAMP president, said the Nationwide Mortgage Licensing System is something the group has wanted for a long time. It supports background checks, starting education and continuing education as things that will bring professionalism back to the industry. But there are things with Dodd-Frank which need a few fixes and this is where the bills introduced by Miller come in, he continued.
Randy Ross, CAMP's Washington lobbyist, explained that in crafting the legislation, the group had to deal with the realities in Congress. It had to find something doable and knew there was no chance to change Dodd-Frank. But there was a better change to get something passed that had a narrow focus, which could get the support of Frank.
By not going for the whole ball of wax, it shows the organization is being reasonable in its requests and it also helps in rebuilding the industry's reputation, he said.
The first of the bills Kreger discussed would fix the loan officer compensation rule, by allowing commission to be paid to the originator when the borrower pays the fees.
When the comp rule first went into effect on April 1, mortgage brokers in California “were prepared, rather than putting then putting their heads in the sand,” he said. Originators may not have liked it, but at least they were ready for it, he continued.
Ross said right now they are working on fine-tuning the language in the bill and if everything lines up it could get done by the end of the year.
Another bill from Miller, Kreger said, is a purely technical correction that would allow the originator to make reductions in his or her fees to cover discrepancies in the good-faith estimate which happen in the last minute to cover closing costs.
CAMP vice president Ken Jones said the best chance for passage was to find language not tied to percentage for tolerances and that has to work in all scenarios.
The organization also supports a bill from Miller and Rep. Brad Sherman, D-Calif., which would permanently extend the higher conforming loan limits. In this case, Jones noted, the problem is with members of the Republican caucus who want to deleverage the government-sponsored enterprises.
Jones also warned that GSE limits are reformulated every year using a “lagging” median formula. So in a year, when they are redone, the limits could go down even further.
Another issue in Washington the group is working on involves appraiser independence. CAMP is looking to get a law passed which will allow mortgage originators to choose the appraisal management company that assigns the appraiser.
The argument in favor is that by having the originator choose the AMC, they will pick ones that use appraisers that have local knowledge of where the property is located.
Kreger said legislators are now looking to CAMP for ideas, saying brokers are their “consultants” on the industry. Members need to meet with their local representatives, because speaking with them validates everything that Ross talks with them about.
But in speaking with their representative, Ross added, brokers need to stay on message and to remember the 3 C's: be clear, be constructive and be courteous.
