The past several weeks the National Association of Mortgage Brokers (NAMB) and the National Association of Independent Housing Professionals (NAIHP) have been attempting to file suit to both delay the implementation of and overturn the Frank-Dodd bill which effected loan officer compensation and consumers loan options. For more on the Frank-Dodd Bill, read my older posts on the subject HERE and HERE.
Unfortunately, for those of us who believe this bill is bad for the industry and the recovery of our real estate market, Federal Judge Beryl Howell decided today to reject the two associations requests to even delay the implementation of these laws (a request that was supported by Ben Bernanke of the Federal Reserve, whose agency is to enforce this bill, as he does not believe that enough has been done to inform lenders and the public of this law’s effect and consequences prior to its enactment.)
Since the suit has been thrown out without being heard further, Frank-Dodd will in fact take effect tomorrow. NAMB and NAIHP are filing for appeal on this case as “Judge Howell’s decision was rendered even though she found the rule could cause was irreparable harm. That was shocking to us in hearing this decision.” This statement, made by Mike Anderson of NAMB, very succinctly puts what most people working in this industry feel, that this deal will do nothing but harm.
I agree that its surprising a federal judge would look at a law that was passed, realize it will cause irrepairable damage to our nation and economy, and not do anything about it…but the reality is that federal judges are SUPPOSED to be ruling on only the constitutionality or legality of an issue, not whether it is right or wrong (but rarely stick to it regardless). From a constitutional perspective, this damaging law was passed by a majority in both the house and senate, and signed by the president. No provisions of this bill directly violate any freedoms guaranteed to the citizens of our nation under the constitution. There is nothing that violates any part of any other federal law already in place either. From a federal judge’s perspective, and what their role is supposed to be, I’m not sure I would have overturned this law in that position either.
Just because I understand the decision doesn’t mean I don’t wish it was different! Oh well, as an individual Realtor I don’t get to make the laws, I just have to follow whatever they put in place for me to deal with…
Maybe the judge who hears the appeal will be one of the judges who views their role as a judge differently and likes to create precident, interperetations, and law from the bench rather than just rule on the law as it is written. If not, we’ll be stuck with Frank-Dodd unless congress decides they screwed up and repeals the law they created…fat chance of them admitting they were wrong on anything!
Read the Article about the denial of the case by NAMB and NAIHP at http://nationalmortgageprofessional.com/news24410/judge-denies-namb%E2%80%99s-temporary-restraining-order-against-fed%E2%80%99s-lo-compensation-rule#
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