NAMB's New Registry To Eliminating Abusive Lending Practices by Lew Sichelman
In an attempt to fend off federal legislation, the beleaguered National Association of Mortgage Brokers is putting the finishing touches on an industry-wide registry it believes will "go a long way toward eliminating abusive lending practices." NAMB's effort involves a universal listing of individual loan originators as well as companies, each uniquely identified, according to Neill Fendly, a Phoenix loan broker and the association's new president. Once the clearinghouse is up and running, Fendly explained, mortgage companies will stock it with information on persons and firms which engage in improper practices. Then, employers will be able to consult the registry and "avoid hiring" individuals with poor track records, and wholesale lenders and secondary market investors can "refuse to do business" with people or companies whose past is questionable. "NAMB is committed to making this registry a reality," said Fendly, who runs the Pathfinder Mortgage Corp., adding that his organization has the support of the Mortgage Bankers Association as well as Fannie Mae and Freddie Mac. But the NAMB officer also said it will take better enforcement of existing laws to wipe out abusive practices, and urged state and federal authorities to expand their efforts rather than enact new rules and regulations. And he's not alone in that sentiment, either. In fact, practically the entire mortgage industry said that the government's proposal to extend the protections of the Home Ownership and Equity Protection Act to more consumers would make it more difficult and more expensive for many needy home owners to borrow against the equity they have built up in their homes. "Any blanket provisions should be examined carefully to be sure they don't do more harm than good," Laura Borrelli of the National Home Equity Mortgage Association recently testified before Congress. America's Community Bankers, which represents the savings and loan business, also called for stronger enforcement by federal regulators but recommended against statutory changes. Maintaining that illegal practices are the "work of a tiny minority" of loan originators who "routinely ignore" licensing and consumer protection laws and "flout" the Home Ownership and Equity Protection Act, Fendly of the NAMB said the way to stop abuses is to enforce rules that already are on the books. New laws are not necessary, he added. They "will only mean a greater compliance burden for those brokers who believe in complying and more meaningless words for those who do not," he said. "The legitimate industry already feels thoroughly regulated. But increased enforcement should be directed at those who ignore the law." Law-abiding brokers work hard to comply with the rules and "resent those disreputable companies that do not," he added. "As an industry, we would like nothing more than to see them stopped. But they way to stop them is to enforce existing laws." | 
