The Consumer Financial Protection Bureau on Thursday will hold a second conference within two days with 17 small lender participants who are slated to give the agency commentary regarding its controversial mortgage compensation rule.
Participants on Wednesday’s conference call said the agency seems to be heading toward a flat fee compensation model on “consumer paid” mortgage transactions. It also appears the agency has opened the door once again to the idea of dual compensation where the loan officer can be paid by both a wholesaler and consumer.
But these participants—mostly requesting they not be identified—said the agency seems a bit confused on where they are headed on compensation.
Mike Anderson, a former National Association of Mortgage Brokers officer who runs Essential Mortgage in Louisiana, said the agency, at times, “seems confused.”
He and others said the CFPB may be leaning toward flat fee compensation on transactions where affiliates of the same company are involved in loan production, which could greatly impact realty firms that own a mortgage banking or brokerage operation.
“NAR is not going to be pleased with this,” said one loan broker who was in on the call.
In early May the CFPB issued a 37-page draft governing compensation practices for all lenders and brokers. Under the Small Business Regulatory Enforcement Act the agency invited 17 participants to review the proposals and offer their views. Those comments are due next week.
To date, the response from lenders and brokers has been mostly negative on the proposals. “The entire industry had better be worried,” Anderson told National Mortgage News.
CFPB’s Wednesday call was hosted by Charlie Honig, managing counsel of regulations, and Kelly Thompson Cochran, deputy assistant director of regulations.
