In the late hours of last night groups representing the mortgage brokers won an appeal to temporarily block the Federal Reserve rule that was going to limit compensation for mortgage originators. The law was supposed to help prevent loan originators from making too much money on providing loans with high interest rates. In other words, we need a political platform to blame the housing mess on, and Wall St. and Congress are too powerful, so lets take money away from the families of loan originators. --- Yes I'm bitter
The US Appeals court, pressured by the National Association of Mortgage Brokers, and the Independent Housing Professionals were able to get a last minute objections to block the rule that was going to start today.
According to the judge- "The purpose of this administrative stay is to give the court sufficient opportunity to consider the merits of the motions for emergency relief and should not be construed in any as a ruling on the merits of those motions,"
My hope and the hope of so many others who make their living be securing mortgage financing home owners, is that the Fed does not have the right or the power to implement such a rule.
I can tell you the last week has been crazy across the industry. Loan originators have been scrambling to submit,register, and lock as many loans as possible under the current compensation guidelines. Not only to maximize the amount of money they can secure for themselves and their families but also for their clients.
Under current guidelines I can make 3% in yield spread premium on a loan YSP, and credit back 1% of that profit to help with closing costs or to be more competitive in the market place.
The new guidline starts the loan officer at a lower starting point for compensation and there is less profit to help the consumer.
Gone are the days of high rates and lots of points on loans. The sub-prime crash stopped most of that, and now consumers are more educated about their rights and their options. This is backward looking legislation that isn't necessary. We could save the tax payers money if we stopped bailing out businesses and blowing up 3rd world countries. Let's focus on what's important.
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