The National Association of Mortgage Brokers is rallying thousands of its members by urging them to tell their congressional representatives to oppose the financial-overhaul legislation pending in Congress.
NAMB president and chief executive, Roy DeLoach, told the Wall Street Journal it would hurt competition in the mortgage market by driving small brokerages out of business, leaving fewer to compete with mortgage lenders.
“We’ve told our members: This isn’t good for small business; this isn’t good for consumers,” he said. The group has roughly 8,500 members, down from about 25,000 at the height of the housing market boom.
Part of the bill aims to curb the type of fees charged on riskier loans and would ban yield spread premiums to brokers and loans officers for steering consumers to a certain type of loan or rate says the WSJ.
For the reverse mortgage industry, the bill is unlikely to totally eliminate yield spread premiums according to people we spoke too. However, lenders could only offer one rate for each program to prevent brokers from steering consumers into higher margin reverse mortgage products.
The Wall Street reform bill passed the House by a vote of 237 to 192 last week. A vote in the Senate has been delayed until mid July.