Whatrnfollows is a brief summary of key points raised by MBA, principally regardingrnrules surrounding LO compensation.  MBArnprovided a significant discussion of each of these points and its letter andrnsupporting information can be read in its entirety here:  MBA’s Full Letter</p

Restrictions onrnPoints and Fees and Commission Based Payments: </p<ul class="unIndentedList"<liAnrnexemption from the Dodd-Frank provision that might prohibit the payment of transaction-specificrncommission for originated by a creditor or a mortgage brokerage if the creditorrnor brokerage also receives points and fees from the borrower is necessary andrnshould be put in place before the January implementation of the Dodd-Frankrnrules. However, MBA opposes the exemptionrncurrently proposed which would requirernthat creditors and brokerages make available a zero-zero loan with no</spanupfront discount points, origination points, or fees if commission-basedrncompensation is paid to an originator. </li</ul

Many lendersrnreport difficulties in offering this option and the exception goes considerablyrnbeyond the stated purpose of the requirement by facilitating comparisonrnshopping and ensuring consumers receive value for the payment of points andrnfees.  These are issues morernappropriately dealt with elsewhere such as in RESPA-TILA rulemaking. </p

If the Zero-Zerornexemption is established, MBA urges that all fees for “third-partyrnservices,” be excluded from the calculation of a zero-zero loan and, forrnthat matter, the points and fees calculations for QM and HOEPA loans, so thatrnborrowers do not face an apples-to-oranges comparison when comparing loans fromrnlenders with and without affiliates.  </p<ul class="unIndentedList"<liWhilernMBA supports rules requiring bona fide</idiscount points that result in real rate reductions, regulators must recognizernthat such a reduction cannot be quantified in terms of a specific andrnpre-determined fraction of a reduction in all cases. If the requirement is unworkable, discountrnpoints may become unavailable despite their value to consumers. </li</ul<ul class="unIndentedList"<liThernfinal rule regarding Proxies should permit differences in compensation based onrncost differences among products; incentivize offering of good sustainablernproducts such as state agency or Community Reinvestment Act loans; and contain anrninclusive list of proxies and exceptions.rn</li</ul<ul class="unIndentedList"<liMBArnis concerned that options for bonuses, profit-sharing, and pooled compensation provided under the provision are notrnfeasible for smaller monoline mortgage lenders and consequently will placernthese firms at a disadvantage in competing for loan originators. </li</ul<ul class="unIndentedList"<liThernexception to the rule permitting a LO's compensation be reduced to payrnorigination charges where there is an unanticipated increase in the closingrncosts attributable to non-affiliated third parties is too limited and should bernexpanded. </li</ul