Regulation Z loan origination compensation rules were slated to become mandatory for applications received on or after April 1, 2010. The rules apply to closed-end consumer credit transactions secured by a dwelling.
Two entities, the National Association of Mortgage Brokers (NAMB) and National Association of Independent Housing Professionals, Inc. (NAIHP), sought to prevent enforcement of the loan originator rules, asserting the Federal Reserve Board exceeded its authority in promulgating them. On March 30, 2011, the federal District Court for the District of Columbia denied motions for a Temporary Restraining Order and for Preliminary Injunction.
On March 31, 2011 the U.S. Court of Appeals for the District of Columbia Circuit stayed implementation of final rule pending appeal. The court set very short timeframes for responses to be filed. The government’s response was due by noon on Monday April 4, 2011. The appellants had until 10:00 a.m. April 5, 2011 to file their response.
On April 5, 2011 the Court of Appeals denied the emergency motions for expedited relief and to stay implementation of the compensation rule.
So what does this mean?
The compensation rule is in effect.
* If you have already implemented the rule just proceed under the new rule.
* If you have not yet implemented the new rule you need to do so quickly.
Further appeals from NAMB and NAIHP are possible.
