The Fed Sued Over LO Comp. What's Next?

The Fed Sued Over LO Comp. What's Next?

As promised, the National Association of Independent Housing Professionals filed suit against the Federal Reserve Board Monday morning, seeking to block the loan officer compensation rule. (See our story at: www.nationalmortgagenews.com) The big question some loan brokers might be asking is this: where is the National Association of Mortgage Brokers? It would make sense that these two trade groups should coordinate their efforts, but there seems to be some bad blood between them. We'll save that tale for another time. Meanwhile, students of mortgage banking/brokering might want to keep this one thought in mind: the three largest legal settlements involving abusive subprime lending practices involve three retail originators: Ameriquest, Household Finance, and Associates First Capital Corp./Citigroup. All were retail lenders — two of which came to be controlled by megabanks. Loan brokers had nothing to do with these cases. And as I recall, Iowa Attorney General Tom Miller, who headed the Ameriquest settlement, promised to look into the broker role in abusive subprime lending (via Argent) but seems to have dropped the ball. Why? And now AG Miller is knee-deep in servicing and robo-signing talks…