Following two lawsuits this week filed by the National Association of Independent Housing Professionals (NAIHP) and the National Association of Mortgage Brokers (NAMB) against the Federal Reserve Board, the agency filed a motion to consolidate the lawsuits, which target its loan officer compensation rule.
On Thursday, NAMB filed suit, on the heels of NAHIP’s suit, which was filed Monday.
NAIHP President Marc Savitt said the Fed’s decision to consolidate the lawsuits was predictable. “NAIHP has always believed a united front would enable our industry to prevail in this matter. We look forward to working with NAMB, to achieve success for consumers and the mortgage/housing industry,” NAIHP said in a statement.
The suits seek to restrain the implementation of a specific section of the Fed’s loan originator compensation rule, slated to go into effect on April 1.
“This section, if implemented, would prohibit mortgage brokers from paying their loan officers commissions based on fees paid by the consumer,” NAMB stated. According to NAIHP, the rule “eliminates competition, which increases costs for consumers and creates more business failures for small business.”
There has been confusion surrounding the rule for several months leading up to its scheduled implementation.
Written by Elizabeth Ecker