April 9th, 2011 11:14 AM by BILL WILBANKS
Though the Federal appeal I'd mentioned in an earlier blog was dismissed this week on the mortgage loan officer compensation rule, at least for this round, NAMB and NAIHP the two national mortgage originator professional organizations that had sued for a stay in the Federal Reserve Board Rule scheduled to take effect 4/1/2011 plan to pursue new avenues to stand up for the mortgage originator and the consumers right to choice that the industry wholeheartedly believes the new rule stomps on. Fewer pricing options for the consumer can't be better...somebody out there has to get it! DC simply doesn't...that's a shock. So, though pricing (points) have been slowly edging up for the last 30+ days anyway, it has been moving laterally until this week. This slow upward movement on the bond has built-in energy not unlike a fault line...it's not if, it's when we will see it break for what would be called a "sudden" interest rate move. Nothing sudden about it. Read on... If you can, grab a great rate soon folks. And if you still can refinance, don't second guess yourself out of the opportunity with property values continuing the slide. Just look at the latest Case-Schiller data.
April 9th Update: Rates have been running about 0.125% (1/8) higher this week since the new rule went into effect from all of our lenders. Cause and effect? You decide. Most days on most rate levels you will now see either a points due from you or credited to you option, rarely a zero point option unless it happens to fall that way. In the past, before the April 1st rule change, the originator could offer a lower rate level to you or offer to pay part or all of your closing costs paid out of their lender paid fee to "sweeten the offer" based on the rate you selected. That is not allowed under the new Federal Reserve compensation rule. Originators argued that would have fewer options and that the consumer would not be better served after the change, but apparently no one in DC was home, cared enough to listen or change their mind. They are going to help the consumer if it it kill us. Too strong, I don't think so. If that's better serving John and Betty Q-Public, the best thing that could happen for me and my customer is to have DC go on an extended vacation (like the Cowboy Poet Festival in Nevada maybe) and stop dabbling in what they refuse to understand, like the REAL WORLD. But the borrower will pay the freight once again for the term of their loan with the higher rate. Feel protected folks? Most consumers never knew it even happened. And there is more to come as the government jumps in the fray to solve the home crisis. Look at this article from March 28.