I had the privilege of listening to a conference call from Mortgage Market Guide today as they interviewed Paul Mondor a Federal Reserve Attorney about the Fed's new proposed rules on Reg Z. It was easy to tell that Mr. Mondor does not think highly of the mortgage industry and thinks that closing a loan today is simple and easy and that anyone can do it.
After listening to this conference call I came away thinking does the Fed believe in free markets and do they still believe in capitalism? Or is all profit bad now? It's scary to think about.
Here is the crux of the matter and the Fed's Reg Z proposal--they don't want our compensation to be based on any loan terms such as loan amount, interest rate, loan to value, etc. Mr. Mondor said the Fed wants our compensation to be exactly the same on every loan for every borrower regardless of the size of the loan or its complexity. And they would not allow us to even DECREASE our compensation for a certain borrower for any reason. They want to control exactly how much we make!
I thought we lived in a FREE country???
Maybe, we don't anymore.
Imagine as a real estate agent your compensation is now a fixed dollar amount no matter what the price of the home is, or how complex the transaction is, or how much time and money you have to invest to help your clients.
That is what the Fed wants to do to us and the mortgage industry it appears. And guess what? The BIG banks are rooting for this! They would love it if a mortgage professional was no more than a Teller or Paper Gatherer. Think of all the money they could save by paying us less. But, is that what you want?
If this proposal to Reg Z passes guess who loses the most. Our clients. I expect a majority of the great mortgage professionals will probably leave the business as their years of experience, knowledge, and skills may have little to no value in the marketplace as the Fed tries to commoditize our industry.
We as mortgage professionals need the help of every real estate agent and NAR to fight these types of proposals. Why? We are seen as "evil" people by the federal government and they are not listening to us. But, NAR has a powerful voice and we need your help.