Down to the Wire….
The judge Tuesday held a 2 1/2 hour hearing in the law suit on the Loan Origination Compensation rules. The hearing was on the NAMB/NAIHP motion for a temporary restraining order to prevent the rules from becoming effective on April 1. The hearing went very well from the lender standpoint. The judge was extremely engaged, she asked good questions and was very even handed in her approach. If anything she grilled the Federal Reserve attorney in a more rigorous manner than she did the attorneys for the two broker groups. Best of all at the end of the hearing the judge gave the CMBP attorneys, representing our group in our amicus brief, a chance to speak and they were able to make our points on the Fed overreach and the arbitrary and capricious nature of the rule.
Our lawyers, and the lawyers for the broker groups, were feeling extremely good and upbeat after the hearing. It is hard to predict how a federal judge will rule, but everyone felt that we made a strong case and answered all the judges questions in a way that advanced our cause. The judge’s last words to all the parties were that we should expect her ruling shortly. If the judge rules in favor of granting a temporary restraining order, she will probably also grant a preliminary injunction, which would prevent the rule from becoming effective until after July 21st, when the new Consumer Protection Bureau comes into effect. At that point we will have the opportunity to make our case again in the regulatory process that the new Bureau will have to follow before they can promulgate regulations to enforce the Dodd Frank Act loan originator compensation provisions. .
Glen Corso, Managing Director, The Community Mortgage Banking Project