The National Association of Mortgage Brokers is calling on the Consumer Financial Protection Bureau to make immediate changes to the loan originator compensation regulations.
NAMB President Richard Bettencourt has written to CFPB director Kathy Kraninger raising two key initiatives suggested by a group of lender-employers:
- Permit voluntary reductions by loan officers to their compensation in response to competition
- Allow reductions to compensation when the originator makes an error
“NAMB finds the suggestion to reduce the income of employees who must earn a fixed commission rate set by the government completely unacceptable, particularly when the suggestion is coming from a group of employers that do not have fixed compensation and are free to raise fees and rates at their discretion,” the letter says.
It says that government-imposed price controls allow “inefficient companies to target workers’/employees’ pay in order for the corporation to keep more of the mortgage origination pie.”
NAMB suggests a solution would be to permit the consumer or creditor to pay, in addition to the loan originator’s fixed lender-contracted commission, a flat payment.
The association also believes that the CFPB should re-examine the rationale for the 3% cap on points and fees for Qualified Mortgages and either increase that amount, remove items that are double counted, or explore other ways to combat steering.
It believes its solution would mean a reduction in low-loan amount mortgages.
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