The National Association of Mortgage Brokers is contemplating suing the Federal Reserve Board over its looming loan officer compensation rule, according to trade group officials familiar with the matter.
However, late this week NAMB's annual president Michael D'Alonzo, and chief lobbyists Roy DeLoach declined to comment on the matter.
Mortgage brokers say NAMB is out soliciting funds to finance its claim.
Earlier this month, National Mortgage News reported that the National Association of Independent Housing Professionals had planned to sue the Fed, arguing that the central bank's compensation rule is illegal and should be withdrawn because the agency "failed to demonstrate even a remote correlation between a mortgage loan originator's compensation and abusive, deceptive or unfair practices."
The rule goes into effect April 1. The Fed's latest proposal stipulates that payments to an LO (be it a loan broker or otherwise) cannot be based on a loan's interest rate or terms. The Fed is banning LOs from receiving compensation payments from both a borrower and a lender on the same deal.
NAIHP is managed by West Virginia loan broker Marc Savitt, a past president of NAMB. NAIHP's initial goal is to obtain a temporary restraining order against the Fed, effectively blocking the comp rule.
Some brokers are trying to convince NAMB to combine forces with NAIHP on their respective legal claims.
