Mortgage brokers call for uniform application of non-traditional loan guidanceMortgagePress.comNAMB, CSBS, AARMR, non-traditional loan guidance, Harry H. Dinham
State-level companion guidance should mirror recent
The National Association of Mortgage Brokers has urged federal
and state regulators to ensure that any guidance on non-traditional
loans be uniformly applied to all mortgage originators and enforced
in the same manner.
In early November 2006, the NAMB board of directors unanimously
passed a resolution urging the federal banking agencies to delay
implementation of their recent guidance that addressed issues
relating to non-traditional mortgages until companion guidance that
embodied the same principles could be applied evenly and in the
same fashion to all mortgage originators.
NAMB is now responding to companion guidance recently issued by
the Conference of State Bank Supervisors and the American
Association of Residential Mortgage Regulators, which is largely
based on the federal guidelines published in early October 2006.
NAMB President Harry H. Dinham, CMC said the association supported
the guidance, but didnt believe it would be effective unless
consistently applied to all mortgage originators.
Uneven or uncoordinated implementation of either the federal or
state-level companion guidance will result in consumer confusion
and marketplace inefficiencies that will hurt small businesses and
potential homebuyers and sellers, said Dinham.
He noted that NAMB could only support the companion guidance if
1. Adopted by each state in a form and substance that mirrored
the principles and standards outlined in the federal guidance (no
more, no less);
2. Applied to all mortgage originators; and
3. Implemented with the same force and effect as the federal
guidance, (e.g., as guidance or best practices, not as law or
The regulators have stated that they believe this guidance will
protect consumers and enhance the safety and soundness of the
industry, said Dinham. We support them in this goal, but it is hard
to envision this happening unless consumers are protected by the
same set of guidelines, regardless of where they choose to get a
NAMB representatives were active in the comment process that led
to the federal non-traditional loan guidance, and Dinham said the
association is still dedicated to working with industry partners
and regulators to create guidance that truly meets the needs of
For more information, visit www.namb.org.