The Consumer Financial Protection Bureau and the government’s Small Business Review Panel next week will hold a private forum on its new proposal to revise the way loan officers, brokers and lenders are compensated on loan transactions.
The meeting, on May 23 in Washington, is by invitation only.
The proposal, which raises the concept of flat fee payments in certain transactions, is meeting from stiff resistance from broker and loan officer groups. Sometime this summer the CFPB will issue a notice of proposed rulemaking, and officially begin accepting public comments.
IMMAAG, a loan broker advocacy group based in Colorado, is circulating a new petition aimed at amending the Dodd-Frank Act, and heading off the changes.
In comments provided to National Mortgage News, IMMAAG chief Bill Kidwell said the agency “appears to be leaving the issue of dual compensation to continue to serve an unlevel playing field.” He added that CFPB “continues to base direction on the same misunderstood impact of front end fees versus fees paid by the rate.”
Mike Anderson, president of Essential Mortgage, like many, dislikes the notion of a flat fee for any type of compensation. “Since the beginning of time mortgages have been sold, traded and priced in basis points not flat fees,” he said. “Mortgages are priced according to risks in basis points based on LTV, credit scores, property type and occupancy. How on earth can you change this?”
