Fed Rule Gets Gut Punched - 01.21.11
Today's Poll: Do you think the Fed Rule will be postponed?
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5pence: (January 22, 2011 8:22am)
I'm starting to think the only way America is going to get sane again is if other countries stop loaning us money for the banks to gamble and we have to live within our means. Like Ron Paul says, It's ridiculous and wasteful to have over 1,000 military bases around the globe. The wars in Afghan and Iraq are not protecting US citizens. SS and Medicare must remain. America losing it's credit rating might be the best thing for our government to get serious about taking care of the peoples business. There is a coup going on that includes our Republican President Obama. Still, I wonder why he looked so shook after that meeting with Bush to exchange power. Did Bush threaten his life and more? I would not put it beyond that redneck. "Democracy, national sovereignty and global economic integration are mutually incompatible. It's possible to have any 2 but not all 3. It's the inescapable trilemma of a world economy" - Dani Rodrik - Harvard Economist.
sue806: (January 21, 2011 10:32pm)
Stop paying for your neighbors’ mortgage or Wall Street bonuses by signing this petition. Unitedinprosperity.org was created to petition the government to STOP their current policy of socializing the losses at the taxpayers’ expense that allow the profits to remain Wall Streets'. Which is absurd when ninety eight percent of American citizens have been financially hurt by the housing and foreclosure crisis, signing this petition allows your voice to be heard: There is a solution,read about it.
5pence: (January 21, 2011 5:25pm)
Sorry, my last comment was supposed to be in quotes " ". I just agreed with it so heartedly that I posted it in haste. There's going to be QE's as long as there's unemployment, because it's a good excuse to transfer more wealth "creating jobs" .... at McDonalds. I'm still dumbfounded that we owe the Fed $5.3 trillion and that number keeps going up with every QE. The interest alone that we owe the Fed must be huge and it's only going to keep growing. But hey, the elite are just fine so we should all just be quiet and be happy/ecstatic with whatever meager means they provide. Wait a minute, what are they providing? Aren't they just taking away... and out of the kindness of their black hearts trickling down just enough to keep us complacent? I'm sure they have hordes of sociologists and psychologists that tell them exactly how much the peons will put up with. The 21st century kind of sucks.
5pence: (January 21, 2011 4:52pm)
Do you remember the day bankster Ben said the sub prime crisis was “well contained”? How about the times he lied under oath to congress about the fed doing ZERO QE one the very same days brilliant ticker guy Karl Denninger has well documented Fed criminals were buying Treasury toilet paper with QE. How many people’s fingers and toes would it take to count every prediction or statement bankster Ben has made that time and evidence showed was 100% untrue. Even my dumbest relative guesses right 50% of the time. Thus, one can only assume that when bankster Ben seems almost NEVER to get it right he must fall into the liar category.
mdeery: (January 21, 2011 4:49pm)
the magical economic data presented recently on unemployment figures etc is something Houdini would have been proud of himself.
mdeery: (January 21, 2011 4:47pm)
where driving up the stock market is now part of "QE2" which will keep the required funds from flowing into bonds to start our rally. I see us going over 3.5% for a bit very soon thus spiking rates a tad. I only see our bond rally happening if 1. we get a huge implosion in Europe soon which may initiate another “flight to safety trade” 2. the Irish voters finally hog tie a few politicians over O Connell bridge in Dublin ( that’s my wish LOL) or 3. Bernanks 'signals" there will be no more QE3 in a few months time and then everyone jumps out of equities knowing full well it was just a bubble anyway and then we get our rally in bonds again as that money needs to be parked somewhere. But I have a feeling there will be more QE3 because The Ben Bernank PHD knows he is boxed in a corner now and if he pulls the plug on QE there will be a plummet in the stock market (of probably the +20% that it has risen since QE2) thus reinforcing that fact that this "recovery" was built on sand and the ma
mdeery: (January 21, 2011 4:46pm)
Plain and simple, the Fed is an arm of the banking cartel Period! They are also creating the next bubble to burst in the stock market, Here is why. I can't see the bond market getting its required rally to break 3.25 on the 10 year and 100+ on the 4% coupon anytime soon ( which would lead to rates down at 4.375% again) because the equity market needs to break first. Unfortunately bad news is good for the stock markets as it reinforces the need for QE2 and of course good news is good for the stock markets as it drives up stocks too, it is a win win for equity traders right now…remember when bad news was good for bonds?...interesting yesterday like clockwork when the all the equity markets were down and boom they all bought on the dip and took the S&P and DOW into the green again, nothing can stop the stock markets if they are being supported by the Fed and QE2! Its because of this new Fed mandate where .
5pence: (January 21, 2011 2:30pm)
And don't forget that the TBTF's are part owners of the Federal Reserve - any wonder why? Crony capitalism is reaching new heights on the shoulders of the people.
End The Fed: (January 21, 2011 2:19pm)
EDIT: Bernanke is NOT a democratically elected official. He's an appointee.
End The Fed: (January 21, 2011 2:18pm)
Sorry Koolaidspitter but BigJ is right. If anyone does not know the real history of the Fed, now is a good opportunity to educate yourself since they are now messing with our very livelihoods. Check out the book he recommended, or also look for Eustace Mullins's "Secrets of the Federal Reserve". They're both quick, easy reads, and they are more like an Indiana Jones novel than non-fiction. Please also show support for Ron Paul and his efforts to audit the Fed. This cartel is wreaking havoc on the American economy and now our lives! Remember, the Federal Reserve is neither Federal nor a "reserve", and Bernanke (nor any other Fed chairman) is a democratically elected official.
JSR: (January 21, 2011 1:27pm)
One of the problems with this discussion is that the Federal Reserve Board is NOT an Agency, therefore does not really need to comply with SBREFA. Look for them to ignore completely or come out with something that is very vague, which will contribute to the confusion and consternation of our members (MLO's).
FinanceLogic: (January 21, 2011 1:11pm)
Let's not forget that after ruling goes into effect some loans will fall apart at the closing table. Case in point... I recently under-disclosed the recording fee on the GFE for a purchase loan. I had to give a $7 broker credit on the front page of HUD to cure the GFE tolerance. THIS WILL NO LONGER BE ALLOWED. ANY broker/LO credits at closing are deemed a "change in compensation" so if the attorney, lender, or real estate agent doesn't opt to cover it for you then you could lose the deal, even if it's a $1 mistake! BROKER and LO credits will be GONE. How does that help the consumer!?!?
dirtygreygoose: (January 21, 2011 1:09pm)
Hey Brian and Frank. Just wanted to thank you once again for all the hard work you do for our industry. I was able to post your video to some of our state congressmen Face Book pages and have gotten to real good responses. I would suggest all those who have contacts with the powers that be in Washington, to forward this video and stress that they give NAMB great consideration on what is being discussed. Thanks again guys!
5pence: (January 21, 2011 12:50pm)
The Fed is not a governing body, why are they making rules for private business?
Barbara in DFW: (January 21, 2011 11:58am)
The FED RESERVE is NOT a Government Entity, it's a an illegally originated PRIVATELY held group. check out this site! http://www.apfn.org/apfn/fed_reserve.htm
tbwbrian: (January 21, 2011 11:56am)
we'll get you guys a head count. lets get this forwarded to everyone. brian
ssfranny: (January 21, 2011 11:14am)
In regards to SRP I thought that you could not get paid based on ANY terms of the loan meaning rate, loan amount and term. Anyone know this for sure and would this not eliminate SRP??
Appraiser Micro: (January 21, 2011 10:42am)
Looks like a lot of the tbws posters might just end up being in that segment of borrowers who push housing prices down themselves. It's coming full circle.
Koolaidspitter: (January 21, 2011 10:39am)
BigfreakinJ...thanks for the slam...nice to know someone I would assume is in the industry has no problem insulting someone who was just trying to share some info. Since you must know it all share with us who the Fed shareholders are...oh, and while you're at it if there's any other info that you think I (or the rest of us under the rock) may have missed feel free to share so we can all be smart like you. gimme a break....I've been so busy trying to feed my family in this overregulated business that I haven't had time to dust off my Econ101 book that I used 25 years ago in college.
Bono Vox: (January 21, 2011 10:23am)
Nuke: For now, Realtors are immune. They have a large, homogenous lobby. We have brokers, regional bankers and mega bankers. PRICING: Less competition means higher prices. Regional banks here anticipate 30-40%+ of mtg bankers will exit industry this year. COMP PLAN: I don't find it that confusing. We'll be paid a stipend plus bps, or we'll be paid bps. All based on volume. Brokers - ask your wholesalers what they are doing. SCUTTLEBUTT: Bps at regionals will be 70 - 150 per deal depending on the bank and the bankers volume that month - remember, tiered commission based on your performance is still ok. (because BOA, Chase and Wells like it). It's Friday. Pour me a drink!
Daggone: (January 21, 2011 9:56am)
small correction on my statement of less commission. I meant less of a % YSP. If I were to generalize $$ I make per loan, it is more closely related than the % I make per loan. Smaller loans take the same amount of my time, paper, and other resources, os as a %YSP, they pay more. And, shoot me, but when I have repeat customers for 15 yrs, I give them a small break.. . Just like the guy who services my car and gives me free windshield washing fluid.
Daggone: (January 21, 2011 9:51am)
ssfranny The whole comp rule has been worked out for years. The states dictate the maximum you can make and then lenders cap perhaps a lower number. I don't have a problem in the world with that. It allows me to compete, and it does offer consumer protection. Our business is not different than when you go buy one bar of soap for $1.99 or you can buy four for $6.49. If I have a larger loan I can make less commission because I have a floor as to what is a profit to my company. From what I have seen from one lender, I will not be able to compete with a bank who is collecting SRP. At the moment I am almost always cheaper than the bank. Going forward I will have no way to change what I am charging, I will not be able to capture the larger loans. Or I can set my YSP low and work part time to only do the larger loans. Bottom line = costlier for consumers.
mdeery: (January 21, 2011 9:50am)
I hope Ron Paul kicks The Ben Bernank PHD right in the nuts when he puts him up before congress soon.
ssfranny: (January 21, 2011 9:48am)
Lastly, anyone with half a brain knows this is a money grab by the big banks. So if you want to make a fixed price per loan your lender like B Of A will give you a par price with you making fee upfront and a rate of probably .50% higher for your fee. So on a $200,000 loan they'll make 3 points when they sell and only pay you half that. Just a big money bag by the corrupt d-bag banks which caused most of this like Citi and B of A. This is a big pissing match between govt and the banks. Govt gives TARP to big banks they pay back in record time as to not have pay guidelines still go back and pay record bonuses a year later and at the same time tighten credit to where only people with 700 FICOs and 20% equity down payment can get best pricing. Housing will never recover until these tards in DC figure out the big banks are putting the screws to everyone.
ssfranny: (January 21, 2011 9:36am)
Id also love to know how they can enforce the 3% of loan amount rule. If you write an agreement where you want to make $3000 per deal what if you do a $75,000 loan? No one will do a loan under $75,000 if its capped at 3% so the people this crap finreg bill is designed to help will be screwed. Also, from what I understand you will not be able to drop your price if you're competing against someone. Isnt this "restraint of trade"?? Good lord this is what you get with uberliberal socilaists like Sen Merkeley and Kloubachar writing LO compensation. Putting Dodd and Frank in charge of this bill is like putting Bernie Madoff in charge of writing SEC laws. REPEAL IT!!!
ssfranny: (January 21, 2011 9:31am)
this has all gotten out of control starting with SAFE act and the banks wanting to push all brokers out of the business. Moronic SAFE act rules about financial "responsibility" and people paying for classes and testing and then having license pulled 6 months later due to a credit score? Many good LOs have been pushed out of business or working under someone elses number. GFE 2010 shows in polain english what broker makes no same disclosure for banks or SRP. HUD1 has AT LEAST 3 diff places where it shows what broker/banker is making. Confusing disclosures have confused consumers even more than before. LO compensation rules is the cherry on top. WHEN HAS THE GOVT/FFED EVER TOLD AN INDUSTRY WHAT THEY CAN MAKE??? So if you write deal with lender that you want to make $3000 per loan the banks will just do it for less since they get other bank business. Their LOs will be screwed too. I've heard Wells new pay plan is 1200/mo and 10 BPS. Next is nationalization like student loans
Chuck@HRC: (January 21, 2011 9:24am)
Donblakely: Since this issue has been discussed in other formus, I thought I'd pass along what has been said about sending video links to Senators and/or Congressional members. Apparently, the congress' email systems regularly "drop" video attachments (I presume for security reasons). You may have to burn a CD and snail-mail it to Senator Sessions or a better way may be to just send the link and let someone in his office access the video directly.
DSM: (January 21, 2011 9:21am)
proceedwithcaution: agree with you it is unnecessary. if the agencies had the resources and energy to just enforce existing laws and regs, with licensing in place (which we've wanted for years), we will be able to better police the offenders and give them the mortgage death penalty of being unable to originate again. LOs need to read the reg and have an intelligent discussion about the obvious unclarity. Although i understand its part of the change process--Ranting just gives us a poor perception with the public and law makers who are trying to 'protect' them.
5pence: (January 21, 2011 9:19am)
One thing for sure makes no sense, regulations didn't kill the mortgage market, lack of enforcement of the regulations that were existing did. The solution for a lack of enforcement of regulations is not more regulations! It's the ultimate in stupidity and done just to make it look like our government is doing something for the people when in fact they aren't. They're using the excuse that more regulation is needed to steal from small businesses - re-regulate around the banks needs and everything will be fine. Screw the consumer and small business. The Dodd/Frank bill is over 2,000 pages and they say it will take years to figure out. Glass-Steagal was 17 pages long and served this country well for 70 years. This "more regulation" bs is a smoke-screen to take more from us. More regulations mean nothing and a library full of regulations also means nothing when there's no enforcement. It seems the regulations are more a transfer of wealth than an honest attempt at consumer service, to me.
donblakeley: (January 21, 2011 9:15am)
None of this legislation has anything to do with multimillion $$$ bonuses used to get around the Million dollar salary accounting rule.
donblakeley: (January 21, 2011 9:13am)
I have sent the TBWS Daily to Senator Sessions of Alabama. I pray this makes a difference. If not, then we might start selling alarms systems from here as well.
donblakeley: (January 21, 2011 9:12am)
I have sent the TBWS Daily to Senator Sessions of Alabama. I pray this makes a difference. If not, then we might start selling alarms systems from here as well.
5pence: (January 21, 2011 9:09am)
You know what, thinking about it, Bush 2 graduated from Harvard. He as much stated that he rarely studied and his intelligence shows it. He was probably graduated due to daddy. Now look at all the millionaire congresspeople - especially the leadership. All college degreed and from good schools, and yet they lack the common sense God gave to a baboon. Faux degrees IMO, paid for through donations or favors and paid back through donations or favors. Another scam. Highly educated certainly doesn't equate with high intelligence with these guys. Something I ran across. "Google has an online ad that has been listing I.Q. scores of various celebrities. Here are two that caught my eye: Kim Kardashian’s I.Q.: 135 Ben Bernanke’s I.Q.: 112."
Daggone: (January 21, 2011 9:09am)
Ok, so I'd seriously like to know. Should we all be charging the same percentage no matter the loan size? How many of you think that is right? In my mind I look at a couple of facts. The lender tells me I cannot make more than 3.5 points on any given loan, that is consumer protection. Right now if I have a $50,000 loan I want to make 3 points, but on a $200,000 loan I can make 1.5 points perhaps. Most lenders have a price adjustment for loan size. So if we are being unfair to want to make a reasonable amount no matter the loan size, then how can lenders charge points for a smaller loan? If I have a $300,000 loan and I have stated I want to make 2.5 points on every loan (because my average loan is $100,000), then I will no longer be able to compete with the bank on the larger loans. By the same token if I make it lower, then I can't afford to do the $50,000 loan.
Chuck@HRC: (January 21, 2011 9:07am)
Everyone should read the SBA's Small Business Advisory Board's letter to the Fed to see that the Fed's authority to make this "rule" is being challenged. The link is: http://www.sba.gov/content/letter-dated-122310-board-governors-federal-reserve-system. The SBA SBAB is, in fact, clearly challenging the Fed for ignoring the federal law that applies to the rule-making process.
proceedwithcaution: (January 21, 2011 8:56am)
DSR: I understand the spirit of your statement. However, I think it isn't quite denial. I think is confusion over what "it" is and means as well as hope of a postponement and/or elimination as a result of actually following the law (the point of todays video). It's all overkill/overregulation to me as I am sure you would agree. Unfortunately when it comes to regulators and industry, it seems the only thing we agree on is that we disagree. I think lack of some regulation created this mess, but the pendulum has gone way too far the other way.. there has got to be a happy medium somewhere which seems to be where much of the disagreement is... industry wants the medium, government wants the new rules but for all the wrong reasons.. meaning they do it for political gain, not because of what is right and fair. Now that we have a shift in political power, it should be interesting to see if anything different pans out.
5pence: (January 21, 2011 8:48am)
Of course the Fed rules are going to be implemented for brokers and appraisers on the same day, April Fool's Day. See, they're smarter than all of us combined, so they are allowed to play April Fool's Day jokes (that are real) on brokers, appraisers and consumers. We all deserve to be laughed at. I swear, we've got idiots with college degrees (paper that makes them look smart when they aren't) running things.
JUSTFRANK101: (January 21, 2011 8:46am)
SLOW TO PAY – The “Fair and Reasonable Fee” ruling means nothing unless it is followed by lawful wording stating a 30 day net requirement. 45-60-90 120 days to be paid is pretty normal and no one seems to be making this an issue. The most common response from appraisal management companies is – The Law requires appraisers to utilize our services but we do not have to do anything for appraisers. Which is true, they do not, so no matter what we are still screwed even after April finally rolls around. I am not surprised to learn that LOs and Brokers are now being squeezed a little harder; did you really think the BS was going to pass you by? The Only People that will survive all this crap are those that do it illegally as they have all along. The Banks will use in house appraisers and breast-fed LOs and table scrap Brokers.
kybroker: (January 21, 2011 8:27am)
This is all ridiculous, wonder if Christopher Dodd still has his FOA (Friends Of Angelo) mortgage loan! What an bunch of hipocrites.
Appraiser Micro: (January 21, 2011 8:26am)
Hey Frank&Brian. How about a web video hits count? I want to know how many people view your show.
Appraiser Micro: (January 21, 2011 8:21am)
Hi BigJ - That's one thought provoking lead. Did some gloogling, here is BigJ's premise in a nutshell: http://www.biblebelievers.org.au/jekyll.htm ie Fiat money. / Although I have never understood that system, I guess the messages passed from our American founders still ring true. / You'll catch me supporting lower prices, lower debt, and complete home ownership every day of the weak. Value is not in currency, it is in production of goods and services. There's another vote for no debt, neighborly bartering, and made in usa, for usa. Thanks BigJ.
DSM: (January 21, 2011 8:14am)
There are a lot of people in denial and not facing the changes that are coming. The reason the Fed Bill isn't being challenged is because Frank-Dodd is coming right behind it and it would be a wasted effort. A lot of companies are saying this won't affect them-- hoping this will just go away. Hope is not a good strategy. Get aligned with companies that are on top of this and aren't in denial.
Daggone: (January 21, 2011 8:06am)
I have a lender who was to hold a webinar yesterday on compensation, but delayed it. Not sure it was anything other than the computer was not ready. The comp rule needs to go away. What would be really sweet would be if every loan officer in America would send a letter to their reps in Washington. That is a lot of letters. We truly need to organize on one front, whatever that is - appraisers and loan officers alike to reverse the damage done to our careers and the consumer over the last two years. I have a long letter going out today about "appraisal independence" to my reps. I for am sick to death of waiting six to eight weeks for a crappy appraisal and losing 50% of the deals. It is unconscionable what has been done to our industry in the name of "consumer protection". Your comment about the small business advocacy is interesting. I am going to check them out. Maybe they need to get tens of thousands of letters from those of us who have seen our careers go down the drain.
stellarman: (January 21, 2011 7:56am)
Let's be perfectly clear about this: The Federal Reserve IS NOT A GOVERNMENT AGENCY. Please don't forward this common misconception. IMHO, they have no business being involved in mortgage compensation AT ALL.
Chuck@HRC: (January 21, 2011 7:53am)
Unintended Consequences! In the wake of the implosion experienced in 2007, Congress rushed through MDIA in 2008 with the stated purpose of improving mortgage disclosures. Does anyone really believe anything in MDIA "improved" the disclosures to consumers? Then came SAFE and Dodd-Frank. If I recall correctly, the LO comp provision in Dodd-Frank was added in the middle of the night (committee conference at 2:30 a.m. counts in my book!) by Senator D. Feinstein (D-CA) and charged the Fed with implementing this "rule". In turn, the Fed rushed out this reg so it would get done before another provision of Dodd-Frank kicked-in moving responsibility for consumer protections from the Fed to the CFPA created under Dodd-Frank. If you've read the official language and Fed commentary on this rule, you may quickly realize the Fed may be incapable of providing clear FAQ's. Like alot of legislation recently passed, the words (many, many words) are in english but make no sense!
Nuke 'em Until They Glow and Shoot them In the Dark: (January 21, 2011 7:35am)
I'm amazed, Well not really, that Realtors are largely silent on this issue. I have seen banks killing deals @ closing by Requiring Realtor lower their compensation. If Realtors think they are immune. THINK AGAIN. Also forward to Realtors. Frank I'm sure you will make sure Mable get's the message! LOL @paulsmoney generally congress doesn't like vids, they had rather receive an email through the contact form on their web sites. THey cet so much Crap they have to filter it. Best to go t you congress critters office and either speak with said congress critter or staff and have THEM send the Video on. More likely to be viewed.
RJM: (January 21, 2011 7:33am)
This bill doesn't need to be clarified. It needs to be cremated.
Paulsmoney: (January 21, 2011 6:55am)
I have tried to send various TBWS vidcasts to elected officials but they bounce back with a heading like, "The recipient is above the law and will not accept random diatribes whether you're a constituent or not, so F you". OK not exactly that wording, but the vidcasts are blocked. Anyone have an email list that works or is there another way or format???
John's Texas: (January 21, 2011 6:49am)
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” Charles Darwin
BigJ: (January 21, 2011 6:43am)
Dear Koolaid...I can not believe anyone in this industry let alone the entire popluation of the US doesn't know the FED is a privately held entity. They are no more Federal than Fed X...my God man...what rock have you been living under. Go buy a Book called " The Creature from Jekyll Island", written by G Edwin Griffin. This book is a masterpiece of how we got where we are. Woodrow Wilson wrote in his biography " I am afraid I have set in motion a course of events that will ultimately bring forth the end of America!!!" He was talking about the formation of the Federal Reserve Board which took place in secret on a small island off the coast named Jekyll Island. This meeting took place in 1913 and history was changed that day. GO BUY THE BOOK and be awakened, once and for all.
barbara: (January 21, 2011 6:39am)
After 28 years in the industry, having started in a true, servicing mortgage bank, I seem to be heading back to the original rate sheet I learned on. One size fits all. But I was paid 50 bps. based on loan size. Oops. . .that's now a no no?
GODLIKE: (January 21, 2011 6:39am)
TD HAWK a fixed pay plan isn't "truly the only way to protect consumers from any form of over-payment." What is truly is, is the way to prevent any consumer who needs any type of extra service from getting a loan. Only the cookie cutter type of loans will be able to be worked. Under all the new regs when's the last time you saw a cookie cutter type of loan? 800 credit score and 75% LTV?
proceedwithcaution: (January 21, 2011 6:36am)
I am moving to Switzerland and getting a job driving a snow removal truck. No one will try to change my job and income then. We have a runaway government here making rules in an industry that are knee jerk reactions and are nothing more than political grandstanding. Unintended consequences seems to be the ongoing trend. There is nothing that the government actually runs right and the mroe they try, the worse things get. I used to enjoy this business, but the past few years with the likes of Barney Frank, etc.have left me more and more disheartened. I guess, each day we have to get up and keep trying no matter how hard, rediculous the environment is. Thanks Frank and Brian for all you do. Your factual reporting is extremely eye opening and helpful.
TD Hawk: (January 21, 2011 6:22am)
Everybody in lending should prepare for fixed pay. It's truly the only way to protect consumers from any form of over-payment. Even if we put regulatory efforts aside, profit margins are tighter and won't get any better with increasing inflation. I think it's a pretty safe bet that the originator's slice of the pie will be much smaller. Everybody other then originators is trying to make it happen.
Koolaidspitter: (January 21, 2011 6:15am)
Hey guys. I saw this video about the FED last week. Totally eye opening. I guess I didn't realize that the FED is a private entity...not gubbermint at all. Amazing how much power they seem to wield. http://www.youtube.com/watch?v=ZPWH5TlbloU. I was shocked to find out this info.
Wreckage: (January 21, 2011 6:10am)
Can somebody please explain to me why a non-governmental privately held for tax-exempt profit entity like the Federal Reserve is in charge of any policy making in the US. Having said this, I am not a fan of any industry that is allowed to mandate fees based on the % of the deal. While I have no problem paying market rates for anyone that is informed and provides value to the transaction; most agents, brokers, title and escrow services provide no value and are something that has to be tolerated until the transaction is done and their industry standard fees that have only diminished the value of the transaction are sucked out through escrow.
ben: (January 21, 2011 5:45am)
Were Screwed
Ezradams: (January 21, 2011 5:44am)
Brian, Frank, almost sounds like you're talking about the appraisers problem as well. The FRB has ruled against paying customary and reasonable in the latest interim final ruling. Plus, it looks like the ax will drop on appraiser compensation in the final ruling in April as well. I'll be on the phone with the SBA this morning.
GaryP: (January 21, 2011 5:42am)
Nate, what you might be missing here is this change has nothing to do with Congress or any legislation. This is coming from an appointed body, the Federal Reserve. They don't answer to Congress and are not funded by Congress either. The Dodd Frank bill has similar language, but that won't go into effect until probably 2012. In themeantime, we are forced to deal with the Fed.
GaryP: (January 21, 2011 5:38am)
We got what I consider a sneak peak at our compensation plan last week. The keys things that I took away from it were: 1. Rate sheets are going to be a lot easier to read, i.e. one size fits all. 2. In the future, adjustments will be to rate, not yield. Ptherwise, it would be a violation of the law, right? Would somene remind me of something? This rule was supposed to protect the consumer, right? Am I losing my mind or does this seem like it is totally the opposite? I made the comment that I fully expect that the NMSL website is going to shut down due to high volume on 3/31 because of so many LO's moving their licenses at the last minute to lenders that are capitalizing on the compensation changes. I'm hearing the details of some of the other compensation plans and am left asking why would anyone be willing to accept that? There are definitely going to be winners and losers.
Real Estate Nate: (January 21, 2011 5:32am)
I understand the disappointment and poor track record on reactionary bills/laws over the housing meltdown. We do have some new players in Congress. Let's see what they do. It's a gamble, but what choice do we have at this point?
goneboatingprocessor: (January 21, 2011 5:21am)
don't you think it's comical that NONE of the elected officals voting these laws and changes into place - would be able to get a mortgage for themselves in todays environment (using only their gov job income) because they could not guarantee continuance for 3+ years
melnal99: (January 21, 2011 4:07am)
Anyone who was on the MBA call yesterday with the two Fed attorneys realize, the Fed truly feels the rule is crystal clear. We all know that is not the case. No one thought the sweeping RESPA and TILA changes would take effect on the announced dates and we saw how that turned out. I would not count on this being delayed either.
hmci: (January 21, 2011 12:53am)
Without a major player suing, the Fed will go forward as planned. The bank's profits are not being affected, so they won't sue. They are also in fear of the fed, which is another reason for their silence.