The National Association of Independent Housing Professionals (NAIHP) filed a suit against the Federal Reserve in US District Court on Monday over the agency’s loan originator compensation rule.
Marc Savitt, President of the NAIHP, said the association hired Howrey, a Washington, DC, based law firm to handle the lawsuit and has been soliciting funds to file for the last few weeks.
Drafted last year by the FRB, the rule was intended to prevent mortgage brokers and loan officers from increasing their own compensation by raising consumer loan costs, such as by increasing the interest rate or points. However, the NAIHP said the rule “eliminates competition, which increases costs for consumers and creates more business failures for small business.”
The National Association of Mortgage Brokers has also said it plans to take legal action via YouTube.
Details of the lawsuit have yet to be released, but RMD should have more information by the end of the day. We will update as we get more details.