“Without more cosponsors this legislation will not move. We are told originators and brokers are not contacting their representatives asking for them to cosponsor the legislation.” The Association of Mortgage Professionals (NAMB) writes in a recent blog post. “You will need to take the step of contacting your Representative and ask them to sign on as a co-sponsor to help lower-income borrowers. This year these representatives are looking to get re-elected and will at least listen.”
H.R. 3393, a bill brought forth by Republican Congressman Bill Posey, aims to amend the Truth in Lending Act to remove lender compensation from QM
points and fees compliance rules, which would encourage originators to fund smaller mortgages for clients. The bill has been referred to the House Committee on Financial Services.
One possible reason it has not received enough originator support is that players may be unsure how to contact their Congressman or woman. NAMB is providing guidance and can be contacted at this email address
As the Association of Mortgage Professionals explains, originators are dissuaded from taking smaller loan deals under current fee rules because they are forced to take a loss due to lender compensation that must be factored in to the maximum three percent commission an originator can charge.
The removal of that fee would change the status quo because originators would be able to turn a profit on smaller mortgage loans and, thus, be more likely to arrange them.
And the change would not result in additional fees for clients, according to Fred Kreger of American City Funding.
“The CFPB actually made a comment that payments (to lenders) are already built into the interest rate,” he told MPA in August.
A proposed bill, which would allow brokers to originate smaller mortgages and help lower-income buyers more easily qualify, is not receiving enough industry support.