Loan originators see dark at end of Reg. Z tunnel

“Unfair practices” involving mortgage brokers and loan originators are targeted in a part of the Truth in Lending act slated to begin April 1, but the rule’s effect could turn the world of the broker around, and not in a good way, according to those in the loan industry.

The Z Loan Originator Compensation and Steering 12 CFR 226 rule – more commonly called Reg. Z – implements the Truth In Lending Act passed by Congress in 2008 by strengthening consumer protections. Reg. Z changes the way mortgage brokers, or any person or company that arranges a mortgage for a…