Time to Check Your PreApprovals - United States Court of Appeals Denies Mortgage Broker Request for Stay

Mortgage and Lending with Chris Butaud, CPA, MS Taxation Guild Mortgage Company NMLS# 13157

By the time you read this post, we will officially be in the new age of loan originator compensation regulation.  The purpose of the rule (in the Fed's own words in its August 2010 press release), is

  "to protect mortgage borrowers from unfair, abusive, or deceptive lending practices that can arise from loan originator compensation practices."

Whether these rules ultimately achieve the stated ends will be a subject for debate in the months and years to come.  What is not debatable is that the immediate effect will be to reduce the amount of pesky competition the big banks (who also happen to have the strongest lobby and closest ties to Big Ben (and I am not talking football)) have to contend with. 

As noted in a previous post (Realtor Beware!...), the immediate concern for all Realtors with transactions in process should be to verify that necessary loan approvals are valid once the new rules take effect on April 6th.  Numerous wholesale lender relationships will be temporarily or permanently discontinued until the necessary adjustments can be made to existing contracts and fee arrangements.  Locked loans will generally be safe so long as they close within the original locked term. 

It is not the end of life as we know it, just another bump in the road to recovery.

The opinions expressed in this article / post are entirely my own and do not necessarily represent the views of Guild Mortgage Company.

Posted by

Chris Butaud, CPA
Masters, Taxation
Loan Officer NMLS 13157
Guild Mortgage

Rodney Mason, VP of Mtg Lending
Guaranteed Rate NMLS# 2611 - Atlanta, GA

This will definitely take some time to see the full impact.  I would anticipate that more loan officers will exit the industry.

Apr 05, 2011 02:40 PM
Chris Butaud
Chris Butaud, CPA, MS Taxation Guild Mortgage Company - Kirkland, WA
CPA, MS Taxation,Guild Mortgage Company NMLS #3274

Agree Rodney.  Hang in there!

Apr 06, 2011 08:07 AM