The voice of the broker nation is heard in D.C.: A recap of the NAMB 2005 Legislative and Regulatory ConferenceGary Simpson and George DuarteNAMB legislative conference, 2005, lobbying
Mortgage brokers from across the nation assembled in Washington,
D.C. from April 11-13 for the National Association of Mortgage
Brokers 2005 Legislative and Regulatory Conference. Settling in at
The Wyndham Washington, D.C., not far from Washington's famous K
Street, NAMB members arrived in D.C. with a missionto make the
voice of the mortgage broker nation heard throughout the hallowed
halls of The Capitol. Coming off the success of last year's
legislative conference, when NAMB learned that their lobbying
efforts to kill the controversial RESPA reform rule had succeeded,
this year's conference opened with the confident hope that NAMB's
members would again be able to educate lawmakers about the
industry's concerns. This year's key industry topics included:
•NAMB's support for federal legislation that reduces cases
of abusive lending practices and improves the overall competence of
the mortgage origination industry. This includes support for HR
1295, the bi-partisan Responsible Lending Act of 2005 as a step in
the right direction because it preserves consumers' access to
affordable credit and recognizes that yield spread premiums (YSPs)
are already captured in the annual percentage rate threshold and
don't need to be included again in the points and fees threshold;
and
•NAMB's concern that increased regulatory review of
government-sponsored enterprises (GSEs) could inhibit innovation,
particularly the so-called "bright line test," a proposal to ban
any GSE loan activity unless it involved a closed loan and to
disallow direct or indirect underwriting, which would prohibit
mortgage broker access to Fannie Mae and Freddie Macs automated
underwriting systems.
The conference kicked off on April 11 with the Opening
Reception, sponsored by Freddie Mac, at the Daughters of the
American Revolution (DAR) headquarters. Held in the DAR's outdoor
portico, adjacent to the O'Byrne Gallery, conference attendees were
treated to a buffet dinner, cocktails and a stunning view of the
setting sun. More than 200 attendees networked and renewed old
acquaintances before getting down to business the next day.
On April 12, NAMB President Bob Armbruster welcomed conference
attendees at the NAMB President's Briefing and outlined the
industry's legislative stakes. After President Armbruster's
remarks, several seminars were held to bring conference attendees
up to speed on industry trends and concerns. Attendees were able to
participate in a lively discussion on abusive lending practices
from a diverse panel of industry and consumer group experts at the
Abusive Lending Seminar. Panelists included NAMB Director Kate
Crawford, Mike Calhoun from the Center for Responsible Lending,
Margo Saunders from the National Consumer Law Center, Monica
Gonzales from the National Community Reinvestment Coalition, Faith
Schwartz of Option One Mortgage Corporation, and Jeff Zeltzer of
the National Home Equity Mortgage Association. While members of the
panel disagreed on several points, they all agreed on the need to
curb abusive lending practices. NAMB Grassroots Lobbyist Jeff Glass
provided attendees with details about the NAMB's Key Congressional
Contact Program. At the House Financial Services Committee Outlook
Seminar, Rep. Bob Ney of Ohio detailed HR 1259, The Responsible
Lending Act of 2005, the bill that he co-sponsored with Rep. Paul
Kanjorski of Pennsylvania. More than 150 of the mortgage industry's
movers and shakers were receptive to his speech about the need for
federal legislation to provide a uniform lending environment as
opposed to the patchwork of regulations that currently exists on
the state level. He also spoke of the need to preserve a level
playing field for mortgage brokers. A short question and answer
session followed his speech.
Also on hand from Capitol Hill was Rep. Ruben Hinojosa of Texas
to discuss financial literacy efforts and the need for increased
consumer awareness. Rep. Hinojosa might be best remembered by
mortgage brokers as the member of Congress who, along with Rep.
Judy Biggert of Illinois, circulated the "Dear Colleague" petition
letter to all the members of the House of Representatives
questioning HUD Secretary Alphonso Jacksons RESPA rule change
proposal.
Tuesday afternoon consisted of seminars including Lobby Day
training which prepped attendees for the next day's visit to
Capitol Hill. Legislative and regulatory issues of concern to
mortgage brokers were discussed in seminars on topics such as
affiliated business arrangements (ABAs), mortgage fraud, wage and
hours issues, and the House Financial Services Committee Outlook
Part Two, featuring Rep. Ginny Brown-Waite of Florida. The NAMBPAC
auction and Reception capped off Tuesday evening. The raucous
affair in The Wyndham Washington, D.C.'s elegant Monticello
Ballroom featured a buffet dinner and a cash bar. NAMB
Treasurer/NAMBPAC Vice Chair J.J. Sims and NAMBPAC Committee
Chair/Treasurer Todd Williams hawked several items of presidential,
rock and roll, and sports memorabilia. Thanks to their
effectiveness as barkers and the enthusiastic crowd of mortgage
industry leaders in attendance, the NAMBPAC auction raised
approximately $50,000 for future legislative efforts.
Wednesday was Lobby Day on Capitol Hill for the brokers on hand
in D.C. On this sunny spring morning, conference attendees boarded
shuttle buses to the Capitol building where they met with lawmakers
to discuss their concerns about legislation impacting the mortgage
industry. A collegial atmosphere pervaded the NAMB "R & R" room
in the Longworth House Office Building adjacent to the Capitol
where mortgage brokers could relax and compare notes between
meetings with their respective state legislators. High-fives,
handshakes and smiles appeared on the weary faces of conference
attendees as news began to filter into the room that NAMB's
lobbying efforts were beginning to have an impact. U.S. Department
of Housing and Urban Development Secretary Alphonso Jackson, under
questioning by Rep. Gary Miller of California, in testimony before
the House Financial Services Committee hearing on the Bush
Administration's perspective on GSE regulatory reform, conceded the
need for different conforming loan limits for high-cost states such
as California and New York to ensure that they are served by the
conforming loan limit market. Rep. Katherine Harris of Florida,
fresh from a meeting with members of the Florida Association of
Mortgage Brokers delegation, questioned the wisdom of the "bright
line" test and queried if it would limit mortgage brokers' ability
to compete with the big banks. And, Rep. Spencer Bachus of Alabama
addressed the disparity in guarantee (G) fees charged to mortgage
companies. Currently, these G fees are based on loan volume, thus
favoring the larger mortgage companies and could mean that smaller
mortgage companies pay a G fee that is as much as 15-20 basis
points higher than that charged to larger mortgage companies.
After a long day of meetings with lawmakers, conference
attendees headed over to Bullfeathers Restaurant for the
Congressional Reception. Attendees were treated to a full buffet
dinner and open bar, and reflected on their meeting with their
congressional representatives. Many chose to drink and dine
outdoors under the cherry blossoms during the still-warm Wednesday
afternoon. Others networked at the bar, compared notes from their
lobbying efforts or caught up with old friends and colleagues.
Everyone in attendance agreed that they had succeeded in making the
voices of NAMB heard in the halls of Congress.
NAMB legislative conference report from George
Duarte
Spring is the season of the annual National Association of Mortgage
Brokers Legislative and Regulatory Conference in Washington, D.C.
This year, there were many developments on the federal level,
almost too many to keep track of. You can take comfort in the
knowledge that your fellow brokers on the NAMB Governmental Affairs
Committee and their professional lobbyists have been working
overtime to protect your business.
HR 1295--The Responsible Lending Act of
2005
This bi-partisan, 135-page bill by Reps. Bob Ney of Ohio and Paul
Kanjorski of Pennsylvania is a huge leap forward in attempting to
address predatory/abusive lending practices on a national level.
NAMB is officially supporting this bill, although it is considered
a "work in progress." There are several features of this bill of
great interest to mortgage brokers with the first being that it
would establish national mortgage broker licensing standards and a
national broker registry. This means that a minimum level of
competency would be established and that a mortgage broker would no
longer be limited to doing loans only in their home state, but
could originate loans nationally. HR 1295 would also go a long way
toward establishing a means of identifying originators who are "bad
actors," with the goal of eliminating them from the industry.
Consumers would be able to consult a central registry and check up
on their mortgage originator.
The second significant feature of this bill is the establishing
of uniform national standards, which would preempt the current
uneven and burdensome patchwork of state and municipal laws that
seek to cover mortgage lending abuses. These two features have
great consequences to our business, and predictably have come under
intense attack by opposition to the bill. This bill is currently in
the House Financial Services Committee, and Committee Chair Michael
Oxley from Ohio has just signed on as a sponsor, helping give the
bill a huge boost. This bill has a long way to go to get out of
committee and onto the House floor, but its progress is very
encouraging so far.
RESPA reform
HUD Secretary Alphonso Jackson has been doing his homework on this,
conferring with industry (large banks), consumer groups and members
of the House and Senate. He has promised that he is working on
developing a consensus of all parties before reintroducing RESPA
reform in the spring of 2006. We still don't know what that
proposal will look like, so developments are being monitored very
closely.
Affiliated business arrangements
NAMB supports increased enforcement of current RESPA and other laws
against illegal, abusive and anti-competitive ABAs. NAMB Government
Affairs Committee Chair Marc Savitt has taken this on as a personal
crusade, and has done an exceptional job of raising the visibility
of the issue by testifying before HUD and congressional committees,
and getting a lot of press attention, most recently with a national
article by columnist Ken Harney on this subject.
Increasing loan limits for high-cost
areas
HR 176, the FHA Single-Family Loan Limit Adjustment Act, by Rep.
Gary Miller of California and Barney Frank of Massachusetts would
allow FHA loan limits to increase to 100 percent of the median home
price of the area. Accordingly, the Fannie Mae and Freddie Mac
conforming limits would rise also.
As you can see, your national legislative team has been very
busy and productive looking out for the best interests of the
consumer, and brokers' ability to serve the needs of consumers
effectively. You can help by contacting your local assembly member,
state senator and representative, and ask them to support the bills
that NAMB supports.
George L. Duarte is president and co-owner of Fremont,
Calif.-based Horizon Financial Associates. He also serves as vice
president of the California Association of Mortgage Brokers and
west regional vice chair for NAMB. He can be reached by phone at
(800) 956-6663 or e-mail
[email protected].
