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Mar 10, 2008

NYAMB and NAMB fight back: Brokers respond to Sen. Schumer's national op-ed attack in Wall Street JournalMortgagePress.comSchumer,brokers On Aug. 9, Sen. Charles Schumer submitted an op-ed piece to The Wall Street Journal titled, "New laws needed to curb unscrupulous brokers." In the article, he took aim and fired blame for the current housing market conditions directly at Mortgage Brokers. Members of the New York Association of Mortgage Brokers have met with Schumer annually in Washington, D.C. at the National Association of Mortgage Brokers Legislative & Regulatory Conference to keep him informed of the efforts of groups such as NYAMB and NAMB. The primary purpose of these meetings during NAMB's Legislative & Regulatory Conference in D.C. is to stress the importance of the role of the Mortgage Broker to the consumer in the home-buying process. In addition, these meetings with elected officials are used as mini-education sessions and platforms for some of the current issues faced by the broker industry, including the discussion of a national registry for all mortgage loan originators—not just Mortgage Brokers. The point of this registry would be to weed out the bad actors in the industry, as well as to keep a level playing field within all realms of the loan originating industry, thus not targeting any one sector of the industry. "For loan origination, if we really want to protect consumers and unmask the bad actors who originate loans, we need to implement a national registry that includes every originator, regardless of whether they work for a bank, a broker, lender or wherever," said NAMB President George Hanzimanolis, CRMS. "NAMB has lobbied for such a registry for four years, and it's no surprise we're seeing it included in many of the reforms being discussed today." In late July, NAMB Executive Vice President Roy DeLoach, NYAMB Legislative Committee Chair Doug Baum, NAMB President George Hanzimanolis, NYAMB 2006-2007 President Gregory Krauza, NAMB Lobbyist Andrew Lowenthal and NYAMB Lobbyist Glenn Riddell met with Sen. Schumer in his Washington, D.C. office. The meeting was held so that the mortgage industry reps could bring to the attention of Sen. Schumer that his proposed legislation regarding borrower protection strategies singled out Mortgage Brokers. The senator then directed his aides to look into his proposed legislation to ensure it included all loan originators. Sen. Schumer has been well aware of the strides that Mortgage Brokers have made to protect the consumer, while helping them achieve the American dream of homeownership. It was with great displeasure that Mortgage Brokers woke up on Aug. 9 to read a national article printed in The Wall Street Journal, in which Sen. Schumer singled out those Mortgage Brokers he had met with and praised for years, blaming this one segment for the current market conditions and rate of foreclosure. "We were disappointed that, after meeting with Sen. Schumer less than a week before, he continued to single out brokers in his rhetoric," said Krauza. "We had expressed our concerns and felt he understood the complexities of the market and our role." NYAMB and NAMB jointly took action yet again, penning a rebuttal to Sen. Schumer's scathing attack on the industry. Titled "Memo to Schumer: Don't blame the brokers," the article ran on Aug. 23, and in it, NYAMB and NAMB jointly reminded Sen. Schumer and the American public that Mortgage Brokers are not the only ones who originate loans. They pointed out that Sen. Schumer failed to mention mortgage bankers and credit unions in his letter. NYAMB and NAMB agreed with the senator on many points in his article, such as that "there are some major issues that need to be addressed within the housing market and that new rules and regulations are necessary to restore confidence in the industry." But the brokers were outraged that Sen. Schumer ignored these other groups and falsely labeled Mortgage Brokers as not only the only group originating loans, but as the only group responsible for the burgeoning foreclosure epidemic that the nation is currently experiencing. In the article, NYAMB and NAMB stated that "while blaming the broker might make good headlines for the senator today, it marginalizes the very people with the experience, knowledge and ability to help consumers in the future—Mortgage Brokers—without offering any real protections to consumers and causing further damage to the housing market at a time when it is hobbling." "In a market where a correction has affected values and borrowers' ability to refinance, there are always people out there who want to point a finger or blame someone—and there's plenty of blame to go around," said Hanzimanolis. "But we all know it's not just loan officers and brokers who are to blame. We need to look at the entire industry and each segment in the industry." NYAMB and NAMB both hold their members' interests, as well as those of the American consumer population, at heart. In recent statements made by the senator regarding the industry, Schumer has referred to banks and lenders—not Mortgage Brokers. The quick-thinking efforts of both NYAMB and NAMB have truly made a difference. "My disappointment has faded as I have recently read the senator's comments that have included bank originations," said Krauza. "I applaud his ability to process our information and conclude there are multiple factors in the current liquidity crisis." Though this might seem a small victory—conveying a message directly to a U.S. senator enough to slightly change his vocabulary—it truly is a much larger victory in the end. This goes to show NYAMB and NAMB members just what their associations can—and will—do for them. The strength of an association's voice is much louder than the strength of one, as proven recently by NYAMB and NAMB.
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