The U.S. Court of Appeals for the District of Columbia ruled in favor of the Fed, denying the stay request of the National Association of Mortgage Brokers (NAMB) and the National Association of Independent Housing Professionals (NAIHP) and allowing widely-loathed loan officer compensation rules to go into effect.

The mortgage origination trade organizations had hoped to prevent that, arguing that they would cause "irreparable harm" to the industry and put many mortgage brokers out of business.

The new loan officer compensation rules are intended to prevent brokers from steering borrowers into more expensive loans. Under the new rules, loan officer compensation can vary based on the amount of the loan or the total volume of originations by the officer, but not on the terms and rate of the loan, among other restrictions.

The rule had been set to go into effect April 1. NAMB’s attempt to get an injunction had been denied by a lower court, but broker’s hopes had been raised by the actions of the appeals court, which had authorized a temporary stay of the rules pending an appeals court hearing on April 5.

But hopes for a more lasting roadblock to the rules were dashed late Tuesday night, when the appeals court ruled that NAMD and NAIHP had "not satisfied the stringent standards required for a stay pending appeal." That means the rules are now in effect.

Though unsuccessful in preventing the rules from going into effect, trade groups have the option of continuing to pursue their case in the hopes of getting them overturned. In a video announcement on the group’s website, the government affairs chair for NAMB, Mike Anderson, said the group plans to continue its court fight.

"Yesterday was disappointing, [but] it’s not the end of the road. We have decided that NAMB will go forward with the appeals process….We are not giving up the fight," said Anderson. He said the group will also lobby legislatively. "Everyone’s in disbelief, there’s no question."