NAMB Raps Fed Fee Proposal

The National Association of Mortgages Brokers contends that the Federal Reserve Board's proposal requiring brokers to disclose their fees up front and in dollars simply places mortgage brokers at a competitive disadvantage to banks.The Fed proposal would hurt thousands of small brokerage shops that sell loans to investors just like banks, NAMB executive vice president Roy DeLoach said. He added that the NAMB is trying to determine whether the Fed complied with the Federal Regulatory Flexibility Act in measuring the impact of the proposal on small businesses. The Fed is issuing its Home Ownership and Equity Protection Act proposal for a 90-day comment period. One Washington mortgage banking consultant said the Fed's treatment of broker fees is similar to that of the Real Estate Settlement Procedures Act proposal expected to be issued for public comment by the Department of Housing and Urban Development in six to eight weeks. Like the HUD rule, the Fed's proposal would stop brokers from making money from interest rate movements. "The Fed is effectively implementing RESPA reform when it comes to yield-spread premiums and mortgage broker compensation," Potomac Partners' Brian Chappelle said. The NAMB can be found online at http://www.namb.org.