Though seriously wounded, the National Association of Mortgage Brokers has a lot of fight left in it.
Down to just a few more than 5,000 members but no longer with a full-time Washington staff, the group still plans to challenge the Federal Reserve Board's compensation rule and hopes to persuade the new Congress to revisit the SAFE Act, all while trying to help mortgage brokers comply with regulations it sees as grossly unfair, leadership said at the NAMB West conference this weekend.
"We are going to forge ahead with a rigorous agenda," said Michael D'Alonzo of the Creative Mortgage Group in Maple Glen, Pa., who was installed as NAMB's president to replace an ailing William Howe. "It's been a tough couple of years on all of us, but those of us who are left are serious professionals who have been in this business for years and plan to remain in this business."
But board member Michael Anderson, who chair's NAMB's government affairs committee, said the rules that regulators are placing on mortgage brokers are making it more and more difficult for them to originate loans.
"The way we do business today is being flushed down the toilet," said Anderson, who is president of the Essential Mortgage Co. in Baton Rouge, La. "But I, for one, refuse to go to work at Wal-Mart."
The organization has many problems with the Fed compensation rule, which takes effect April 1. One "big flaw" is that it treats mortgage broker firms the same as loan originators, Anderson told a conference session. Another is that it does not allow originators to lower their commissions "to get a deal in the door."
Roy DeLoach, the NAMB's former executive vice president who recently started his own lobbying firm but retains the NAMB as a client, said the rule is based largely on the Fed's philosophy that mortgage brokers do not compete with banks. And in some cases, he added, it is in direct violation of the Real Estate Settlement and Procedures Act.
"They're confused, and they're confusing the market," he said. "It's terrible."
The NAMB leadership said it is going to try to convince the Fed to delay implementation of the compensation rule for a year. But if it fails, the group might challenge the rule in court -- "if it is financially feasible to do so," said Anderson.
The latter step will be expensive, the Louisiana broker conceded. But he added that several small mortgage bankers who fear for their own existence might join in the effort. "A lot of folks are upset about this."
NAMB also has plenty of issues with the SAFE Act, which was supposed to bring uniformity to the way states license and regulate mortgage brokers but has failed to do so, said Denise Leonard of the Constitution Financial Group in Medford, Mass. "The only thing that is standard is the national test," complained Leonard, a member of the American Association of Residential Mortgage Regulators' industry advisory council.
