Magazine article American Banker

Big Mortgage Lenders Form Lobby outside MBA for Talks at HUD

Magazine article American Banker

Big Mortgage Lenders Form Lobby outside MBA for Talks at HUD

Article excerpt

Large mortgage lenders are forming a coalition to lobby for favorable legislation apart from the Mortgage Bankers Association.

The Mortgage Capitol Group already has GE Capital Mortgage Corp. and PHH U.S. Mortgage Corp. as members, and says Bank of America, Chase and Chemical, Citicorp, Fleet, Home Savings of America, NationsBank, and others have expressed interest.

It has filed for a separate seat on the Department of Housing and Urban Development's panel on negotiated rulemaking. Under a bill in Congress expected to be passed soon, HUD will have to negotiate all the rules it drafts.

In its mission statement, the Mortgage Capitol Group mentions the emergence of national, rather than regional, lenders in the last decade that have different interests and emphases from most MBA members.

The group says the issues it will focus on in the next year are the streamlining of origination processes, cross-marketing, affinity relationships, wholesale lending, third-party loan sources, and litigation assaults on the mortgage industry.

Members and MBA representatives both say the formation of another outside organization does not necessarily mean a chasm between larger lenders and the MBA.

"We were hoping to work closely with the MBA on this," said Jeanne de Cervens, associate general counsel at PHH and a spokeswoman for the new group. "The problem with every organization is that members always have different interests," she added. "We have more sophisticated systems (then smaller lenders), and it's something that is a narrow issue that may not be closely shared with MBA."

Both GE Capital's CEO Greg Barmore, and PHH's CEO H. Robert Nagel are regarded as instrumental forces in creating the Mortgage Capital Group, which has its roots in the Rodash lawsuit, in which a borrower was allowed to rescind a mortgage because of fees not disclosed as finance charges. …

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