Please Restore American Financial Stability the right way Senator Dodd!

Mortgage and Lending with Mortgage Services, Inc.

May 14, 2010

 Re: SA.3962 (Restoring American Financial Stability Act of 2010)

 Dear Senator Dodd,

 I write to you today as a real estate and mortgage professional, and member of the National Association of Realtors(NAR) and a licensed mortgage professional, regarding an amendment (SA. 3962) introduced by Senators Merkley (D-OR) and Klobuchar (D-MN) to S. 3217, the "Restoring American Financial Stability Act of 2010" which was approved.  I have serious concerns with the amendment and fear it will harm small business and consumers nationwide.  For the reasons below, I strongly urge you to oppose this and any other amendments, that would treat origination channels differently, which has already been demonstrated by the lack of licensing requirements for loan originators who are employed by banks.  

I believe the amendment will severely limit a consumer's choice of how best to pay for their home by removing a choice of paying closing costs in the interest rate. The consumer has already had increased closing costs with the implementation of HVCC and the new FHA insurance increases that have been imposed earlier this year which have increased the cost to consumers by more than $700. A consumer with less than a 720 credit score can also expect to pay higher fees in connection with a mortgage through Fannie Mae & Freddie Macs risk score based pricing which most consumers are not aware of. Most of these additional imposed fees can cost the average consumer up to an additional 1-2 percentage points which is paid directly to the Federal Government. Congress has already imposed long overdue nationwide licensing requirements and RESPA changes. These actions alone have reduced the number of loan originators operating across our nation by 60-70 percent. This drastic reduction, although good for our business, will only further drive up the cost of getting a mortgage for the consumer. Less competition will most likely mean higher fees for the consumer. Furthermore, the Federal Reserve Board issued proposed amendments to Regulation Z to prohibit steering late last year which was subject to notice and comments and addresses many of the issues contained in this amendment but in a comprehensive manner.  That rule is in the final rulemaking stages. Congress should allow the Federal Reserve Board to continue reviewing comments and developing a final rule that will deter fee incentives and steering consumers, while preserving mortgage originators' ability to receive compensation without creating an un-level playing field between competitors.  

We have been witnessed a great hardship as a small business because of the economic decline and its effect on the industry.  Small businesses, the cornerstone of American economic prosperity, should not be penalized for helping consumers.  The amendment will not only put small business at a disadvantage to larger lenders, but will inevitably force me to close my doors.  Less competition in the mortgage industry will drive up costs and remove affordable options for consumers.  In particular, low income, minority and rural community borrowers will be hurt the most because this amendment as it will remove competition from the marketplace.

I urge you to ask that the amendment be removed from the bill or fixed so that consumers will continue to have choices at the closing table and mortgage originator's will continue to serve consumers in their communities.  Small business real estate and mortgage professionals like me will be forced to close their doors should this amendment be included in the financial regulatory reform bill. 

Thank you for your time and consideration on this issue.


 Ronald A. Giannamore





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Ronald A. Giannamore

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