The National Association of Mortgage Brokers (NAMB) sent a letter to the Federal Reserve Board requesting it delay enforcement of the changes to Regulation Z for 12 months and for further clarification pertaining to loan originator (LO) compensation which is set to be enforced as of April 1, 2011.
The NAMB calls the rule a “game changer” for the mortgage industry and argues that mortgage brokers and lenders are ill-equipped with how to fully comply with the rule.
“The inevitability and uncertainty of this future rulemaking is very unsettling for our industry as we contemplate significant changes to our business models and practices in order to comply with the Board’s Rule,” said Michael J. D’Alonzo, President of the NAMB in the letter. “In an already turbulent market, what we really need are clear lines and objective parameters within which to operate our businesses.”
Without additional written guidance from the Fed, the NAMB worries that institutions will have to proceed with extreme caution with implementing the new rules and will result in higher costs for consumers.
For a copy of the letter, see here.