Loan Originator Compensation Rule Delayed
April 1, 2011 at 6:51 pm Scott Smalley Leave a comment
The United States Court of Appeals for the District of Columbia has stayed the implementation of certain amendments to Reg. Z outlining compensation rules for mortgage loan originators. The final rule was supposed to go into effect today, April 1, 2011. The final rule prohibits payments to mortgage loan originators (including brokers and loan officers) based on the terms or conditions of the loan other than the amount of the loan.
The Court of Appeals is taking expedited action and is expected to schedule a hearing and make a ruling in short order.
APRIL 5 UPDATE: The Court of Appeals ruled that the National Association of Mortgage Brokers and National Association of Independent Housing Professionals had not “satisfied the stringent standards required for a stay pending appeal,” and dissolved its administrative stay of the rule. The new loan originator compensation rules go into effect immediately. We do note that while the Court of Appeals lifted the stay, the case brought by the NAMB and NAIHP will continue through the appellate process.
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