In the face of new loan officer compensation rules to take effect on April 1, one trade group is fighting back with threats of legal action against the ""Federal Reserve Board"":http://www.federalreserve.gov/ (FRB).
[IMAGE]The ""National Association of Independent Housing Professionals"":http://www.naihp.com (NAIHP) said on its Web site that it has held several high level meetings with various agencies like the Consumer Financial Protection Bureau and the Financial Crisis Inquiry Commission, and with high powered administrators like Elizabeth Warren.
[COLUMN_BREAK]""Our position is clear,"" says the site. ""The FRB lacks the authority to restrict compensation … the rule picks winners and losers in that it eliminates competition, which increases costs for consumers and creates more business failures for small business.""
The group asserts that with the passage of the Dodd-Frank Wall Street Reform Act, the Fed should have withdrawn the proposed loan officer rule rather than finalize it.
The Fed announced in August that mortgage brokers and lenders' mortgage loan officers could no longer receive compensation based on the interest rate of the loan or on other loan terms.
According to a statement released by the agency, the new rule ""will prevent loan originators from increasing their own compensation by raising the consumers' loan costs, such as by increasing the interest rate or points.""
The statement continued, ""Loan originators can continue to receive compensation that is based on a percentage of the loan amount, which is a common practice.""
According to National Mortgage News, NAIHP hopes to begin its legal actions within a month.