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Federal Reserve Board to price fix and mortgages to skyrocket

The Fed has a rule that they are making active on April 1 where each mortgage brokerage and banker (excluding banks) set a fixed percentage that they can charge each and every customer regardless of loan amount.

The Fed has a rule that they are making active on April 1 where each mortgage brokerage and banker (excluding banks) set a fixed percentage that they can charge each and every customer regardless of loan amount.

Is the Federal Reserve Board price fixing the mortgage business in violation of law? The Fed has a rule that they are making active on April 1 where each mortgage brokerage and banker (excluding banks) set a fixed percentage that they can charge each and every customer regardless of loan amount.

So, if a brokerage is made to charge 1% of the loan amount, the people who want a $40,000 mortgage will have to go to a bank that can charge them whatever they want and the person needing a $2,000,000 loan will go to the bank.

In essence, the banks will be able to price fix because the Fed will have taken so many companies out of the loop.

Technically, the Fed is violating many laws and even their own mission. Why are they doing this?

According to Marc Savitt, President of the National Association of Independent Housing Professionals (NAIHP)*, “In my opinion the why is because they want to help the banks. Stronger banks, less time and money for them. Plus, it makes them look like they’re doing their job.”

Savitt goes on to say “the fact the Federal Reserve Board doesn’t have the authority to restrict compensation, we at NAIHP knew for over a year. This has been long planned and it will make mortgages harder to come by and much more expensive.”

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“NAIHP is fighting this with everything we have, including a strong grass roots network”  Savitt added.  “Since we represent everyone in the real estate industry including mortgage brokers, real estate agents, appraisers, title insurance, small banks and consumers, we must make sure that mortgages are provided in a fair way to the person buying a small starter home in Missouri and a mansion in Beverly Hills”

The solution?  Savitt has has met with Elizabeth Warren, talked directly with the Fed, looked for guidance from other industry professionals and has had discussions with attorneys to possibly prepare a case or an injunction to stop the Fed from implementation.

“It stinks that we has hard working small business people have to waste our time volunteering to stop the banks from doing what they did to us in the past decade all over again,” said Savitt. “You would think they would want to get their mortgage business from the (now) NMLS licensed mortgage people that have been scrutinized more than a patted-down airline passenger! But no, they keep attacking.”

Savitt continues, “They have even started trying to limit what real estate agents can charge for commisions.  I wouldn’t be shocked if they wanted to try to get  Congress to let them be in real estate business.”

OK, NAR….ready to rock!

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*Full disclosure- I am a Board Member of NAIHP and am working on this issue with him.  He just comes off better than I do!

Written By

Realty Reality! That describes Fred, a sharp witted and outspoken realist for the mortgage and real estate world who has appeared on CNBC and NPR's Marketplace along with being quoted in the New York Times, The Wall Street Journal and other media outlets. Fred is the CEO of U S Spaces, Inc/Arrivva (a real estate brokerage firm in PA, NJ, DE and CA) and U S Loans Mortgage Inc (mortgage brokerage in PA, CA, FL and VA), and serves on the Board of Directors and is the Federal Legislative Director for the UpFront Mortgage Brokers. Fred is also the co-creator of real estate startup, a mathematically driven rental search engine. See everything Fred at



  1. Nadina Cole-Potter

    November 21, 2010 at 7:58 pm

    If anyone thinks that the Fed is a federal government agency under the control of Congress or the Executive, or even the Supremes, think again. It was formed as a central bank for the benefit of the big banks and everything that gets done is for their benefit, not citizens, not taxpayers, not other businesses, not consumers, and not the economy over all.

    Ultimately, the Fed is not accountable to any body or laws except itself. Folks, we have government by the bankers, for the bankers and of the bankers.

    It might be time to consider how to dismantle the Fed.

  2. Paula Henry

    November 22, 2010 at 5:27 am

    This war was fought years ago and Americans lost. Is it any surprise this is happening as banks end their 100 year charter?

  3. Fred Griffin

    November 22, 2010 at 11:33 am

    The Federal Reserve Bank – is not Federal, it has no Reserves, and it is not a Bank.

  4. steve campbell

    November 22, 2010 at 11:59 am

    isnt the fed just implementing the frank/dodd act ?

  5. Fred Glick

    November 22, 2010 at 4:17 pm

    @Steve. This was not in anyway a part of Dodd Frank. It is something they did on their own and started it over a year ago.

    Parts of DF will temporarily be handled by the Fed until Elizabeth Warren’s organization is started.

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