NAMB: Delay Guidance on 'Exotics'

The National Association of Mortgage Brokers is calling on federal banking regulators to delay implementation of their underwriting guidance on nontraditional mortgage products until state regulators are ready to implement similar guidance.NAMB president Harry Dinham said the guidance will be "ineffective" unless it applies to all mortgage originators. "Uneven or uncoordinated implementation of the federal guidance will simply create consumer confusion and marketplace inefficiencies," according to a resolution adopted by the NAMB's board of directors. State regulators are working on nontraditional mortgage guidance for state-licensed mortgage bankers and brokers that is similar to federal guidance on interest-only and payment-option adjustable-rate mortgages. The state guidance is expected to be issued very soon. Under the federal guidance, banks and thrifts are required to monitor broker originations and take corrective action if a broker does not follow the federal guidance.