The NFMP had a conference call on Friday 9/11 and discussed the document Reg Z.  We are in a 120 day public comment period which ends Christmas Eve 12/24. Everyone is concerned about how brokers are to get paid. There are mostly "Do Nots" and no "Dos".  I direct your attention to page 43,279 of the federal register whereby all originators are supposedly categorized as loan originators. However, as you discovered yesterday in the SAFE act, we are not all treated equally.  There is registration and licensing with the big difference being no CE or exam for the registered.

It appears that an originator can not be compensated to the size of the loan or any of the terms. This then drives the compensation toward an hourly fee or some flat fee that you determine the difficulty of the loan. Now if you are doing a minority loan you have to be uniform in your cost for everyone, so no more 1% origination fee. Also the premium generated on an above par loan can not be used to
offset the borrowers closing costs (this is open for discussion).

Now this is not something to throw your hands up and say, "oh my GOD, what are they going to do to us?"  It IS a time to read this document and see what their thinking is and how we would like to be paid. So in the early stages of discussion here I have proposed this index listing and showing the premium on the essential documents we use in originating, processing and closing a loan. Connie Hearn has augmented that idea with the FNMA letter from the lender to the borrower to include the profit generated when the loan was sold. As was pointed out yesterday, the idea here is to engage the regulators and legislators in a discussion of transparency and the nature of premiums in the mortgage market. They should like it and so should the Treasury and Federal Reserve. The legislators may begin to understand and see the truthfulness to it, but the votes and money come from deeper pockets that will oppose it.

In addition, the NFMP group is trying to ascertain a proposal as to how brokers should be paid. This is where we all come in and suggest what we want in the way of GFE and use of YSP. This new group has some good talent from California, Florida, Mississippi and of course Dallas.

The Reg Z document is 195 pages, but much of it does not pertain to us.  I will keep you updated in the future.

Marty