Late last week, a stay was granted by the US Court of Appeals on the Federal Reserve’s loan officer compensation rule.
The purpose of the administrative stay is to provide the court sufficient opportunity to consider the merits of the motions for emergency relief. Whether or not the stay will end up doing anything more than delaying the changes isn’t clear.
“The fact that this stay was granted is an indication that the judges believe there is something here to warrant the decision of the lower court to be reversed. It’s not a guarantee, but they don’t always do this,” said Marc Savitt, president of the National Association of Independent Housing Professionals (NAIHP) during an interview with RMD last week.
As a result of the stay, wholesale lenders that offer reverse mortgages are scrambling to accommodate brokers who want to submit files under the old compensation plans. For many, this means they have to roll back loan origination software updates that went live before the expected April 1 implementation date.
Genworth Home Equity Access announced it was extending the deadline to submit applications under the current compensation structure to Monday April 4th and Reverseit told brokers it would accept applications already taken under the old compensation guidelines. Sun West and MetLife Home Loans said they’re allowing brokers to continue submitting loans under the old compensation structure as well.
Early this week, things could change. The government is directed to file a combined response to both motions by 12:00 noon, Monday, April 4, 2011, not to exceed 20 pages. The industry groups (National Association of Mortgage Brokers and the National Association of Independent Housing Professionals) then may file a joint reply to the government’s response by 10:00 a.m., Tuesday, April 5, 2011, not to exceed 10 pages.
View the court documents here.