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Fed's Rule on Broker Pay Sets Off Scramble at Banks
American Banker (01/31/11) P. 7 Berry, Kate
Large banks are fine-tuning their pay plans for mortgage brokers and loan officers to comply with a new rule that prevents them from tying compensation to the terms of the loan. The Federal Reserve created the rule in an attempt to crack down on the practice of steering borrowers to high-cost loans; the rule takes effect on April 1. Most banks are expected switch to a flat compensation model; the rule will give mortgage banks an opportunity to poach high-producing loan offices or add brokers as affiliates.
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Monday Morning Cup of Coffee: Regulation Z
Housing Wire (01/31/11) Philyaw, Jason
Regulation Z, a monthly payment disclosure within mortgages, took effect on Jan. 30. Enacted by the Federal Reserve, it requires lenders to disclose how and when a loan's interest rate may change. Lenders also now must provide an interest rate and payment summary in the form of a table instead of a payment schedule box.
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GOP Lawmakers Offer Bill to End Hamp
American Banker (01/31/11) P. 12 Hopkins, Cheyenne
GOP legislators have introduced legislation to end the Home Affordable Modification Program. Rep. Darrell Issa, R-Calif. -- who chairs the Oversight and Government Reform Committee -- said his panel, the Government Accountability Office and the inspector general of TARP are all in agreement that HAMP was unsuccessful.
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Rep. Jason Chaffetz Calls for FOIA to Apply to Fannie-Freddie
The State Column (01/31/11) Phillips, Kramer
Rep. Jason Chaffetz, R-Utah, has re-introduced a measure to bring greater transparency to Fannie Mae and Freddie Mac. H.R. 463 would subject the two mortgage finance giants to the Freedom of Information Act when they are in conservatorship or receivership.
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Home Prices Sink Further
Wall Street Journal (01/31/11) Timiraos, Nick
Home prices fell year over year in all 28 major metro areas covered by the Wall Street Journal's survey of housing-market conditions for the fourth quarter, due to weak demand and tight credit. Zillow.com says Miami, Orlando, Atlanta, Chicago and other cities hit hard by the slump saw the most dramatic depreciation; and cities such as Seattle and Portland, Ore., also saw price drops. There is concern that market conditions could worsen, as millions of homeowners are delinquent on their mortgages or in foreclosure and the job market has yet to pick up.
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