Great News For The Our Industry

NAMB Calls Passage of H.R. 3915 a Victory for Consumers and Small Business
Warns Title III Provisions Will Harm Consumers

McLean, Va. – November 15, 2007 – The National Association of Mortgage Brokers (NAMB) today applauded the House of Representatives for passing H.R. 3915, the “Mortgage Reform and Anti-Predatory Lending Act of 2007 and lauded the preservation of mortgage originator compensation through the Yield Spread Premium as a victory for borrowers and small businesses.

“The yield spread premium is a legal payment paid by a lender to a mortgage broker and it is an integral tool used by mortgage brokers to offer borrowers flexibility in the amount of cash they will need in order to close on a home loan,” said NAMB President George Hanzimanolis. “We thank House Financial Services Committee Chairman Barney Frank (D-MA) and Representative Gary Miller (R-CA) for working in earnest to ensure that mortgage brokers can remain competitive in the mortgage marketplace.”

Hanzimanolis also thanked Rep. Barney Frank and Rep. Gary Miller for their assistance in ensuring that consumers will continue to be able to have the option of obtaining zero-point or no-cost loans from mortgage brokers and lenders.

The bill includes the creation of a national registry of all loan originators regardless of where they work in the mortgage industry. It also establishes strict national standards for all mortgage originators that include criminal background checks, fingerprinting, continuing education and testing.

Although the bill does not require loan officers of federal-depository institutions and their affiliates to comply with these enhanced professional standards, it does recognize that all originators, whether they work for a bank, lender, or mortgage broker, must also be part of the national registry. While we have always recognized the burden that it will place on small mortgage brokers, we have supported and recommended this provision from the beginning.
“NAMB believes the national registry of all originators will be effective protection for consumers against bad actors in this industry,” Hanzimanolis said. “Its all-inclusive national scope means mortgage originators who break the law cannot move from state to state or company to company without being detected. We commend Chairman Frank and Rep. Spencer Bachus (R-AL), the Ranking Member of the Committee, for including all mortgage originators.”

NAMB continues to have concerns over Title III in H.R. 3915. Particularly troubling is the lowering of the “points and fees” trigger for “high-cost loans” under the Home Ownership and Equity Protection Act (HOEPA) from 8 percent to 5 percent, and the inclusion of all costs and fees charged to the borrower. This measure would adversely affect many people by making it impossible to obtain mortgage financing. NAMB will continue to work with policymakers on this issue.

###
The National Association of Mortgage Brokers is the voice of the mortgage broker industry with more than 25,000 members in all 50 states and the District of Columbia. NAMB provides education, certification and government affairs representation for the mortgage broker industry, which originates over 50% of all residential loans in the United States.