The president of the National Association of Mortgage Brokers said last week he will lead an effort to persuade Congress to reverse controversial regulations that prescribe what types of payments are permitted for mortgage-related services. (See related story below and in The Mortgage Marketplace, Nov. 23, on paget.)
"I don't think it's a settled issue,' said H.A. 'Tony' Davis, in an address telecast to about 2,000 NAMB members in 18 cities. Davis, who also is president of Preferred Mortgage Associates in Downers Grove, 111., participated on a panel of experts who explained and analyzed the impact of the new regulations.
The man who developed the regulations, Francis A. Keating, general counsel to the Department of Housing and Urban Development, encouraged the brokers in their effort. even though he continued to disagree with them on a portion of the regulations.
'Go back to the Congress and say, This isn't right. This is antismall business," he advised.
Keating had supported a version of the regulations issued under the Real Estate Settlement Procedures Act. That version would have restricted the payments among affiliated companies and would have limited payments for the use of computerized loan origination systems. HUD, however, was overruled by the White House chief counsel, the Office of Management and Budget and the Department of Justice, all of whom argued that the HUD version was anti-competitive. Keating, however, supported a provision, opposed by the brokers, which requires separate disclosure of their fees.
Keating assured the brokers that aggressive enforcement would not begin until Jan. 1. even though the rules go Into effect Dec. 2. He also said the regulations won't be applied to refinancings until new regulations are prepared. The HousIng and Community Development Act of 1992 placed refinancIngs under Respa.
The brokers were told that the provisions of the regulations relating to controlled business arrangements could change the nature of how they do busIness. 'The regulations will compel and stimulate Joint ventures,' said James A. Brodsky, partner In the Washington law firm of Weiner Brodsky Sidman and Kider.