1. 200 Club Webinar
Dr. Lesli McCollum Gooch, Potomac Partners DC
Fred Kreger, CMC - CAMP Vice-President of Government Affair

2. The New Policy Environment
112th Congress
Congress
House of Representatives (242R, 193D)
• Financial Services Committee
• Chairman Spencer Bachus (R-AL)
• Ranking Member Barney Frank (D-MA)
Senate (51D, 47R, 2I)
• Banking Committee
• Chairman Tim Johnson (D-SD)
• Ranking Member Richard Shelby (R-AL)
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3. 112th Congress
Opportunities to Make a Difference
New Policy Environment = New
Congressional Agenda
Dodd-Frank Act
• Corrections bill
• Oversight of Implementation
• Appraisal Independence
• RESPA/TILA Form Merger
• Creation of CFPB
GSE Reform
Oversight and Review of Foreclosure Mitigation Programs
FHA Reform
Mortgage Interest Deduction
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4. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Goal - Do Not Price-Fix Origination Fees
• Problem: The Dodd-Frank Act prohibits mortgage
originator compensation that varies based on the terms of
the loan (other than the amount of the principal).
• Solution: Amend the Dodd-Frank Act to ensure
regulations do not require fixed loan origination prices.
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5. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Key Points – Do Not Price Fix Origination Fees
• We are concerned that the language will be interpreted by
regulators as requiring a standard fee for all loans, where a
mortgage originator would be required to determine either a “flat
fee” or a fixed percentage that would be both the maximum and
minimum the law would allow him or her to earn for their efforts.
• A flat fee would lead to consequences that would hurt the most
vulnerable in our housing system: those buying entry level
homes and requesting small loans.
• A fixed percentage would result in those receiving higher loan
amounts paying an excessive premium.
• Mortgage originators must have enough flexibility to be responsive
to the uniqueness of each transaction.
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6. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Goal - Preserve Consumer Options for Payment of
Origination Fees
•Problem: The Federal Reserve rule on loan originator compensation
and the Dodd-Frank Act each prohibit the financing of loan originator
compensation if loan originators concurrently receive origination fees
from the borrower.
•Solution: Include language in the Dodd-Frank Act “corrections”
legislation to allow the payment of origination fees up front and
through the interest rate as long as all such fees were fully and clearly
disclosed and agreed to by the consumer earlier in the application
process as defined in TILA and do not increase based on changes in the
terms of the individual loan or the consumer‟s decision about whether
to finance such fees or charges.
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7. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Key Points – Preserve Consumer Options for Payment
of Origination Fees
• The Fed Rule and the Dodd-Frank Act will create situations where
borrowers will have severely limited financing options to meet their
needs.
• Language needs to ensure that a borrower has the ability to finance
closing costs as they deem appropriate for their individual
circumstances (i.e. cash available at closing, length of time planning
to remain in home, refinance, etc.)
• Congress should preserve the borrowers‟ ability to choose low-cost
and zero-point financing for their homes by financing fees and/or
costs into the rate or loan amount, while protecting consumers from
hidden charges or abuse.
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8. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Goal - Ability to Repay and Safe Harbor Provisions
Must Protect Borrower Options
•Problem: The Dodd-Frank Act‟s “ability to repay” language is
intended to ensure creditors follow certain underwriting guidelines
when making mortgage loans. The language offers a safe harbor which,
when conditions are met, grants a presumption to the creditor that
these guidelines have been met. Among the conditions are maximum
fee bars; if the total fees (as defined by Section 103(aa)(4) of TILA)
collected exceed the bar of 3%, the presumption will not be offered.
•Solution: Within the Dodd-Frank Act “corrections” legislation,
remove or increase the fee cap language or change what is included in
the points and fees calculation to protect small loan amounts and
consumers seeking non-government financing.
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9. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Key Points – Ability to Repay and Safe Harbor
Provisions Must Protect Borrower Options
• The fee cap will harm consumers by promoting higher rate steering,
reduce competition between delivery channels, and have a negative
impact on lower loan amounts.
• A 3% cap will harm consumers by reducing competition between
brokers and creditors, since brokers are required to include all
origination paid to the company in the 3% cap while creditors are
only required to include compensation paid to their loan
originator.
• On smaller loans, brokers would exceed the 3%, while creditors
could use the invisible “gain on sale” to retain the safe harbor.
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10. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Key Points cont. – Ability to Repay and Safe Harbor
Provisions Must Protect Borrower Options
• If creditors choose to refuse to lend without the presumption,
brokers will be left with a major void in their ability to compete.
• Consumers seeking conventional financing with loan amounts
below $200,000 could easily be shut out of the marketplace, unable
to obtain financing.
• A better consumer result would be achieved by focusing on more
appropriate ways to prove ability to repay than the fee caps. The
more thorough underwriting standards required by this legislation
are key. Ability to repay is better reflected by actual borrower
documentation than fee caps.
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11. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Goal - Ensure the Dodd-Frank Act’s Liability
Provisions Are Fair and Do Not Invite Abuse
•Problem: The liability provisions for mortgage originators in the
Dodd-Frank Act are overly broad, making mortgage originators liable
for acts they have no control over.
•Solution: Clarify the language in Section 1404 to ensure fairness to
mortgage originators and to prevent frivolous lawsuits.
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12. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Key Points – Ensure the Dodd-Frank Act’s Liability
Provisions Are Fair and Do Not Invite Abuse
Attorney‟s Fees
• The Dodd-Frank Act only allows attorney fees to be paid to
prevailing consumer plaintiffs but not to prevailing mortgage
originator defendants.
• To ensure the legitimate foundation of lawsuits brought under this
clause, attorney‟s fees should be available to both parties should
they prevail.
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13. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Key Points cont. – Ensure the Dodd-Frank Act’s
Liability Provisions Are Fair and Do Not Invite
Abuse
Damages
• The Dodd-Frank Act makes a loan originator liable for every act
performed by a creditor that is regulated by Section 129B of Truth
in Lending.
• The mortgage broker, who by contract is not an agent of the lender,
and who has no underwriting authority or rights, including the
authority to decline on behalf of the lender, would become
responsible for the lender‟s credit decisions.
• Making a mortgage originator liable for underwriting decisions that
must be made by another party or a different company (as is the
case with a mortgage broker) is patently unfair.
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14. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Goal – Allow Mortgage Professionals to Order
Appraisals
•Problem: The Dodd-Frank Act includes language directing the
Federal Reserve Board to prescribe interim final regulations on
appraisal independence to replace the Home Valuation Code of
Conduct (HVCC). The Interim Final Regulations, released on October
18, 2010, define acts or practices that violate appraisal independence
for all individuals involved in the mortgage process.
•While the Fed‟s Rule allows mortgage professionals to order
appraisals, Fannie Mae and Freddie Mac‟s guidelines still prohibit
mortgage professionals from ordering appraisals.
•Solution: Require Fannie Mae and Freddie Mac to follow the Fed‟s
appraisal independence Rule and allow mortgage professionals to order
appraisals.
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15. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Key Points – Allow Mortgage Professionals
to Order Appraisals
• The Dodd-Frank Act repealed the HVCC and directed the Federal
Reserve Board to prohibit improper influence on appraisers and
ensure appraisal independence through regulation.
• In its Interim Final Rule, the Fed equally applied appraisal
standards to all involved in the real estate transaction without
favoring one origination channel over another.
• Fannie Mae and Freddie Mac should follow the Fed‟s appraisal
standard and allow mortgage professionals to order appraisals.
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16. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Goal – Allow for Appraisal Portability
•Problem: The Dodd-Frank Act includes language directing the
regulators to come up with standards regarding appraisal portability.
Such appraisal portability standards have not yet been promulgated.
•Solution: Pursuant to the Dodd-Frank Act, the Federal Reserve
should move forward with regulations allowing for the portability of
appraisal reports.
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17. Dodd-Frank Act Corrections –
Opportunity to Weigh-In
Key Points – Allow for Appraisal Portability
• Regulators should allow for the portability of appraisal reports.
• Appraisal portability allows an appraisal to be used across lenders,
so homebuyers can shop for the best loan without paying for
additional appraisals.
• Regulators should direct lenders to accept appraisals that meet
industry standards, even if ordered by another lender.
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18. Dodd-Frank Act – Implementation
Mortgage Disclosure
Opportunity to Weigh In
with Dept. of Treasury and Elizabeth
Warren
Provide Views About How Merged Form Should
Look:
• Level Playing Field for All Originators
• Reduce Current Consumer Confusion
• Improve Clarity So Consumers Can Make Informed
Decisions
• Consumer Testing to Avoid Unintended Consequences
• Opportunity for Corrections
• Ensure Forms Do Not Add Costs for Consumers
• Ensure Forms Do Not Slow the Process
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19. Dodd-Frank Act – Implementation
HVCC Repeal
Opportunity to Weigh In
with Fed on Appraisal Rule
Comments about Fed Interim Rule:
• Allow mortgage brokers to order appraisals.
• Add NMLS numbers and ‘Certification by
Originator’ to the appraisal.
• Only allow consumers to be charged bona fide
appraisal fees that can be substantiated. Require
disclosure of such fees.
• Prohibit anyone from profiting from the appraisal
process outside of the appraiser, including
commissions for ordering appraisals.
• Allow for appraisal portability.
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20. Dodd-Frank Act – Implementation
HVCC Repeal
Opportunity to Weigh In
with Fed on Appraisal Rule
Comment Deadline: December 27, 2010.
Include Docket Number R-1394and RIN No. AD-7100-56
in the subject line of message.
• Email: regs.comments@federalreserve.gov
• eRulemaking Portal: www.regulations.gov
• Agency Website: www.federalreserve.gov
• Fax (202) 452-3819 or (202) 452-3102
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21. Fed Rule on Loan Originator Compensation
Final Rule released on August 16, 2010
Implementation Date: April 1, 2011
Requirements:
• Pre-Agreement Between Loan Originator and Party Who Pays
Them
• Agreement Must Contain a Compensation Formula
• Does Not Apply When Consumer Pays Compensation to Brokers
only.
• Cannot Receive Compensation from Consumer and Any Other
Source
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22. Fed Rule on Loan Originator Compensation
• Three Prohibitions
• Prohibits payments to the loan originator that are based on the loan’s
interest rate or other loan terms or conditions.
• Prohibits a mortgage broker or loan officer from receiving payments
directly from a consumer while also receiving compensation from the
creditor or another person. However, YSP may be used to pay 3rd
party fees.
• Prohibits a mortgage broker or loan officer from “steering” a
consumer to a creditor offering less favorable terms in order to
increase the broker’s or loan officer’s compensation. However, there
is a safe harbor disclosure.

23. Fed Rule on Loan Originator Compensation
• Who is the Loan Originator
• A person who for compensation or other monetary gain arranges,
negotiates or otherwise obtains an extension of consumer credit
• Includes the creditor only if the creditor does not provide the funds
for the transaction at consummation out of the creditor’s own
resources, including drawing on a bona fide warehouse line of credit,
or out of deposits held by the creditor.
• Includes both loan officer and entity for broker
transaction.
• Does not Include entity for retail or mini
correspondent transaction.

24. Anti-Steering Provision
A Loan Originator May Not Steer a Consumer to Fund a Loan
Governed by a Compensation Pre-Agreement That Would Generate
Greater Compensation Than Other Available Options
-UNLESS-
Such Loan Is In The Consumer’s Interest
Documents to Prove Compliance or a Presumption of Compliance
(Safe Harbor) Must be Maintained for 2 Years
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25. Fed Rule on Loan Originator Compensation
What is Permissible Compensation
• Compensation based on a fixed percentage of the loan amount, with
or without a fixed minimum or maximum dollar amount
• Salary or hourly wage paid by the loan originator’s employer that is
not tied to a specific loan, even if the loan originator also receives
direct compensation from the consumer
• Compensation based on overall loan volume the loan originator
delivers to the creditor in a given time period (i.e., total dollar amount
of loans or total number of loans originated)
• Compensation based on long term performance of the Loan
Originator’s loans.

26. Fed Rule on Loan Originator Compensation
What is NOT Permissible Compensation
• Loan originator compensation may not be based on loan
terms or conditions- for example, the interest rate, the
annual percentage rate, loan to-value ratio, or the
existence of a prepayment penalty.
• A loan originator may not be paid a varying percentage based
on different levels or tiers of loan amounts.
• Loan originator compensation may not be based on a
factor that serves as a proxy for a loan term or condition
(i.e)
• the consumer’s credit score
• debt-to-income ratio

27. Safe Harbor Definition
A Loan Originator is Deemed to Comply with the Anti-Steering
Prohibition IF The Consumer is Presented With At Least
Three Loan Options that Provide:
1. Lowest Interest Rate for which the consumer
qualifies
2. Lowest Total Dollar Amount for Origination Points,
Fees, and Discount Points
3. No Risky Features (Such As a Prepayment Penalty or
Negative Amortization or a Balloon Payment in the
First Seven Years)
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28. Safe Harbor Definition
What is the Lowest Rate?
1. For a loan with an initial fixed rate for at least the
first five years, use the initial rate in effect at
consummation
2. For an adjustable rate loan whose initial rate is not
fixed for at least the first five years and whose rate
varies based on changes to an index, use the fully-
indexed rate in effect at consummation without
regard to any initial discount or premium
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29. Fed Rule on Loan Originator Compensation
Best Practices for Wholesale Lender and Broker Agreements
(Under the FRB Loan Officer Compensation regulation)
• Encourage Specific Pre-Agreements: Wholesale lending
partners should work out specific agreements for
compensation on a broker by broker basis, as different
brokers have different business models and expenses.
• Use Base Rate Sheets: If our wholesale partners choose to
continue to publish rate sheets, we encourage them to use
a standard base rate sheet (similar to what is done
currently) and let the individual brokers apply their pre-
agreements for compensation from yield spread premium
to those base rate and fee scenarios.

30. Fed Rule on Loan Originator Compensation
Best Practices for Wholesale Lender and Broker Agreements
(Under the FRB Loan Officer Compensation regulation)
• Brokers Charging Borrowers: When the borrower pays the Broker’s
origination fees directly though cash, equity or seller credit, allow Brokers
to operate independent of any pre-agreements for compensation with their
wholesale lending partners.
• Yield Spread Premiums: Additional YSP should be allowed to offset any and
all 3rd party fees, whether the Broker is charging origination fees or
receiving YSP per their individual pre-agreements for compensation.
• CAMP Safe Harbor Disclosure: All Brokers and Wholesale Lending partners
should encourage the use and inclusion in all files the CAMP/Ready Price
Safe Harbor disclosure to mitigate any steering litigation.

31. We Can Have an Impact!
• “I want to turn it around. I want us to stop
getting beat up. The best defense is a good
offense.”
• “Last year was a year of accomplishment as we
created and implemented strategies to keep the
broker channel viable. The challenge now is
maintaining the energy and funding to do it all
over again.”
-Fred Kreger, CMC
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32. Leave Behind
Will be available later today or
tomorrow
• www.thecampsite.org
• www.go2comply.com
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33. Together, We CAN Make a Difference!
-Get Involved-
Join the ‘200 Club’
• Exclusive group of individual mortgage professionals
from around the country.
• Sole purpose is to educate and advocate to Federal
legislators and regulators the true value that mortgage
professionals and brokers bring to the table for
consumers.
• The 200 Club keeps you informed and provides
strategic plans to save our industry!
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34. Together, We CAN Make a Difference!
-Get Involved-
Policymakers Need to Know How You are
Impacted by Their Decisions
Unified Voice through Calls to Action.
•Respond to Calls to Action
•Urge Colleagues to Respond to the Calls to Action.
Get to know your Congressional Representatives (and their
aides)
•Make district office visits.
•Participate in coordinated industry „Lobby Days.‟
•Attend Member events.
Work with the 200 Club Team
•Follow 200 Club Updates to stay informed
•Let us know your thoughts: ga@ca-amp.org
•Contact Fred Kreger
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