The Consumer Financial Protection Bureau’s highly anticipated proposed loan officer compensation rule is expected to be released Friday, but it won’t look anything like the agency’s original proposition.
That’s the word from Peter Carroll, assistant director of mortgage markets at the CFPB, who talked about the status of several of his agency’s rule making proposals at the American Association of Residential Mortgage Regulators’ annual conference in Boston.
Carroll didn’t say much about the compensation rule. “I’m very limited about what I can discuss,” he told the conference. But he did promise that it is “coming out very soon.” And he said it will contain “some significant adjustments” from what was originally proposed.
The CFPB has scheduled a briefing Friday to discuss mortgage origination issues.
In early May, the bureau issued a 37-page draft governing compensation practices for all lenders and brokers. The draft, which raised the concept of flat fee payments in certain transactions, has met with stiff resistance from the broker and loan officer communities.
The bureau also said it was considering using its special regulatory powers to ban loan officers from charging upfront discount points and origination fees if they also were being compensated by the buyer of the loan or the loan’s table funder. At the same time, it said it would also consider a partial exemption with certain conditions placed on points and fees.
On origination fees, the bureau floated the idea that lenders should charge a “flat” processing fee that does not vary based on the loan size.
