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].