Industry NewsMortgage

New loan officer compensation rules take effect

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New rules for loan officer compensation are in full effect today after a federal appeals court lifted an order staying their implementation.The rules -- aimed at eliminating incentives for loan originators to steer borrowers into higher-cost loans -- are likely to remain in place pending the outcome of a legal challenge mounted by two groups representing mortgage brokers.The National Association of Independent Housing Professionals (NAIHP) and the National Association of Mortgage Brokers (NAMB) filed legal challenges of the rules last month in U.S. District Court, claiming the Federal Reserve Board lacked the authority to regulate mortgage brokers and that the rules were "arbitrary and capricious."Mortgage brokers -- who work independently from banks, brokering loans through multiple lenders -- maintain that the rules favor loan officers employed by banks, and will drive many of them out of business.The trial court last week denied NAIHP's and NAMB's requests for temporary re...