Legislation that will benefit originators lacks industry support

by Justin da Rosa08 Sep 2015
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.

“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.


  • by Larry D. Shutes | 9/8/2015 12:14:04 PM

    At this email address but you do not include and address, lacks a little detail!

  • by Dumb Founded | 9/8/2015 8:07:43 PM

    The comment section isn't supposed to be free advertising. They probably removed his info.

    Regarding the post, does noone realize since these changes were made and small brokers were forced out of business, now there is NO ONE willing to do THESE small mortgages. The big banks don't want them because they don't make enough money from them. The mortgage officers don't want to waste their time doing them because each mortgage is SO difficult now (and the smaller mortgages even moreso) and there is NO compensation for them.
    The lenders do build their payment into the rates but the mortgage officers do not share in that; we make a flate percent based on volume.
    The small mortgages are just not worth it anymore - at all. Thanks Govie! Your changes screwed the little people AGAIN -who were fine with paying $2000 for all the work done to get their files done. The small broker made a decent FAIR amount and so did the mortgage officer. The caps were fine so there was no reason to change them.


Should CFPB have more supervision over credit agencies?