NAMB FIGHTS!

ATTENTION EVERYONE:

Mortgage brokers are facing extinction. The U.S. House of Representatives is considering a bill that will fundamentally change the way we are paid, outlaw YSP, and legislate underwriting guidelines into law. Additionally, we fear that all subprime lending will cease to exist due to excessive lender liability. It is important that you read this memo.

We are calling upon our members to respond as never before. To save our industry, we are asking you to learn about this threat and then contact your congressman.

TIME IS CRITICAL. The bill became public last week. The U.S. House of Representatives Financial Services Committee will vote next week.

LEARN. Step 1: We have scheduled an information teleconference on Friday, November 2nd at 7:00pm EST (5:00pm MST). This is a free call.

RESPOND. We have prepared sample letters for your use in writing to or calling your congressman. These will be sent to our entire membership on Friday. Important warning: The vote is now scheduled for Tuesday, November 6. Please respond before next Tuesday.

More information is contained below. However, please call in to our conference and respond so that we can preserve the way we do business and the subprime mortgage market.
______________________________________________________________________

Commentary: We urge you to read the balance of this memo before you listen to our teleconference.

On Monday, October 22, 2007, House Financial Services Committee Chairman Barney Frank (D-MA), along with Representatives Miller (D-NC) and Watt (D-NC), introduced H.R. 3915, the "Mortgage Reform and Anti-Predatory Lending Act of 2007."

The bill contains three sections. Title 1 will create a federal duty of care and outlaw steering. The anti-steering language will outlaw incentive compensation and YSP that varies with the terms of a loan. The section will allow indirect compensation if disclosed early in the process. This section also creates a minimum licensing standard for all originators and net worth or bond requirements of $100,000.

Title 2 creates an ability to repay standard and hardwires underwriting guidelines. Underwriting will include a verified ability to repay and take into account amortizing payments. Guidelines will also include taxes and insurance payments when calculating ratios. For refinancing, the act will define and require a net tangible benefit. For prime loans, there is a safe harbor. However, for subprime there is assignee liability and expanded rescission rights. Standards will also create a defense to foreclosure. Severe restrictions will be placed upon first-time homebuyer mortgages with negative amortization features.

Title 3 will expand the existing Section 32 of TILA by reducing the points and fees triggers and expand lender liability. Prohibitions include no balloon loans, no lending without regard to ability to repay, prohibit a pattern or practice of making such loans, restrict late fees, and prohibit the financing of any points/fees. Taken together, the expansive liability and prohibited terms and conditions will make Section 32 lending practically impossible.

This is a critical time. Do not miss this important teleconference!

Links:

NAMB Testimony by President-Elect Marc Savitt, October 24, 2007 HFSC Hearing

NAMB Press Release

Summary of H.R. 3915

Full Bill H.R. 3915

Below, you will find the Friday, November 2nd 2007 conference call put on by NAMB regarding H.R. 3915, a bill that could put mortgage brokers out of business (I have posted it because there were limited lines available for the Thursday and Friday conference calls). If passed, this would have a negative impact on the consumer; not to mention put a lot of small businessmen out of work. All information was borrowed from the UAMB and the NAMB of which I am a member, and if you want to keep your job, I suggest you join as well.

Please listen to the WHOLE conference call (1 hr 11 min) and then contact the proper representatives to take action!

This is the 1st of 3 parts of the conference call (27 min 35 sec):

This is the 2nd of 3 parts of the conference call (23 min 15 sec):

This is the 3rd of 3 parts of the conference call (20 min 44 sec):

Now what are you waiting for? TAKE ACTION! Pass this on to every mortgage, appraisal, and real estate professional you know. Heck, pass it on to the Account Executives as well! Let's not be pushed around like this.

Afterall, "knowledge is power".

*Brett Menzie* - "Your Loan Guy"