FEDERAL LEGISLATION
DFWAMB opposes any attempt to create an unlevel playing field for originators, adversely impact small business or inhibit the ability of a small business to compete fairly in the marketplace. We also oppose initiatives that limit product availability, choice and options for families seeking the goal of homeownership.
GSE Reform
DFWMB is concerned that increased regulatory reviews of the GSEs will inhibit innovation. DFWAMB strongly believes that innovation should not be held hostage to unrestrained regulatory reviews. Of particular concern is the so-called 'bright line' proposal. The 'bright line test' proposes to ban any GSE loan activity unless it involves a closed loan, and further disallow direct or indirect underwriting. This provision would prohibit mortgage broker access to the automated underwriting systems of the GSEs. Mortgage brokers rely on direct access to the GSEs' automated underwriting systems to quickly assess a mortgage application and provide consumers access to mortgage credit. In addition, much-needed GSE-sponsored programs promoting financial literacy and counseling to consumers would be eliminated under this provision. DFWAMB strenuously opposes inclusion of this or similar provisions in any GSE reform legislation.
Fannie Mae and Freddie Mac should be able to bring innovative products to the market quickly to meet the ever-changing needs of mortgage borrowers. Requiring a review of every new initiative, program or activity would unnecessarily delay needed innovation.
Abusive Lending Practices
DFWAMB supports measures that seek to protect consumers from abusive lending practices including formal licensing, pre-licensure education, and continuing education requirements, but believes that to be truly effective such measures should apply not just to mortgage brokers, but to all mortgage originators. To this end, we also support a nationwide registry of all mortgage originators.
Absent Congressional action to establish a uniform national standard, numerous states and cities have attempted to address abusive lending. This has resulted in a patchwork of local and state laws. Although most of these laws are well intended, they fail to consider the risks presented by some borrowers or the diversity of products needed to meet all credit needs. As a result, many legitimate lenders have retreated form markets where such laws have been passed, and many consumers have found that certain beneficial products are no longer available.
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