Mortgage industry representatives have been meeting with CFPB officials to talk about uncertainties and concerns regarding the CFPB’s plans to establish new loan originator compensation rules. This week, through two conference calls, 19 mortgage representatives met with the agency in an effort to get some answers. But what they found instead were more questions.
“I compliment them for reaching out to the small business community,” said National Association of Mortgage Brokers (NAMB) board member Mike Anderson on an association conference call titled Will the CFPB’s Proposed Rules Destroy the Mortgage Industry?
However, Anderson said, there is still widespread confusion among mortgage professionals with more questions than answers.
During a day-long meeting held in May, the group covered the topic of loan officer compensation, which led to two follow up calls held this week for clarification.
“There was even more confusion after that,” Anderson said. “We couldn’t get the questions answered…. we all need to be extremely concerned because this [could be] a stepping stone to the next plateau.”
The main question comes down to points and fees charged by originators, a change which remains unclear from a reverse mortgage compensation standpoint, as reverse mortgage compensation is set by the statue and based on the loan amount. The Bureau can create exemptions to its “points and fees” provision if it finds an action is not in the consumer’s best interest.
The CFPB said during the meetings that it must make some change to the current compensation plans by January 21, 2013, or there will be no fees allowed at all for mortgage originations, as mandated by the Dodd-Frank Act.
“When asked if they were doing studies regarding LO comp, they said all of their studies predated LO comp,” said Valerie Saunders of RE Financial Services. “Why are they doing it now? Because we have a ticking time bomb. Something has to happen by January 21 of 2013 or the ability to charge points, fees and discount points is going to go away.
Written by Elizabeth Ecker