Late Thursday, a stay was granted by the U.S. Court of Appeals on the Federal Reserve Board’s loan officer compensation rule. The National Association of Mortgage Brokers (NAMB) announced the stay on its website and Facebook page late last night. The National Association of Independent Housing Professionals (NAIHP) made a similar announcement today. The rule will be delayed until a hearing on April 5.
“It gives us a little breathing room,” Marc Savitt, NAIHP president told RMD of the stay.
On Monday, the Fed has to respond within 20 pages to the appellate court. Then NAIHP and NAMB will have a combined 10 pages to respond on Tuesday, according to Savitt.
After months of preparation for the rule implementation, scheduled for April 1, NAMB and the National Association of Independent Housing Professionals filed lawsuits against the Fed in an effort to delay implementation of the rule. After a hearing earlier this week, the Court denied motions for a temporary restraining order and preliminary injunction against the rule.
“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,” Savitt said.
While many large reverse mortgage lenders have already announced new compensation plans that are largely based on lender-paid compensation, many were still hoping the rule would be delayed. One broker told RMD yesterday that in sitting down with several peers, they each had different interpretations of the same new plans.
“A lot of brokers are hanging on,” said Savitt. “If [the rule] were to be implemented, they would be closing up shop. This is good for everybody. It gives us four to five days of cooling off.”
See the court documents announcing the stay here.
Written by Elizabeth Ecker