In a move that comes as little surprise, the Board of Governors of the Federal Reserve Board (Fed) have filed a motion in U.S. District Court for the District of Columbia to consolidate the lawsuits filed by National Association of Independent Housing Professionals (NAIHP) and the National Association of Mortgage Brokers (NAMB).
The two lawsuits, filed earlier this week are strikingly similar and both seek permanent injunctions against enforcement of the law and to invalidate the law. The only major difference between the suits is that it appears the NAIHP has challenged the entire rule, whereas NAMB chose to focus on a specific portion, termed "the Challenged Section of the Rule." Both focus on how the rule creates a direct threat to the viability of mortgage brokers while providing creditors (lenders and banks), with unfair advantages regarding LO compensation and yield spread premium.
Realizing that there was a shared goal between the two entities, NAIHP President Marc Savitt had called on NAMB to join forces in a singular effort against the bill. It what may have been a fundraising move, both groups decided to proceed independently.
Assuming that the judges in each case will affirm the motion filed by the Fed, the groups will be forced to work together towards a resolution. In a statement regarding the motion, NAIHP said, "NAIHP has always believed a united front, would enable our industry to prevail in this matter. We look forward to working with NAMB, to achieve success for consumers and the mortgage/housing industry."
A copy of the two original lawsuits can be found below:
