Federal Reserve Board staffers may be reconsidering their position on how fees paid to real estate brokerage and title agency affiliates of mortgage firms are treated under the agency's pending loan officer compensation rule, National Mortgage News has learned.
According to one source close to the situation, the Fed's staff is revising their policy on affiliates and it sounds "very encouraging."
The new affiliate approach is expected to be discussed during the Fed's March 17 webinar on the LO compensation rule.
Trade group officials recently learned that the Fed staff believes fees paid for affiliated title or real estate brokerage services should be lumped together with the lender's compensation to prevent evasion of Truth in Lending Act regulations.
Trade organizations then complained to the Federal Reserve governors in a joint letter.
"This would, in effect, prohibit — for no justifiable reason — a successful and long-established business model…that offers consumers one-stop shopping for services through a network of affiliated companies," the March 4 letter says. (A copy of the correspondence was provided to NMN, which wrote about it last week.)
