1. I am a Mortgage Professional.

If you are Mortgage Professionals, then why do take advantage of consumers by charging excessive Fees and not providing the proper disclosures to your clients?

2. House Bill 3915 passed committe 45 -19 on the morning of Tuesday, November 6th.

The House Bill 3915 did pass, do you wonder why? Have you looked in the mirror lately or turned on the TV and asked why the consumer may need action taken on their behalf? To top it that off you can?t even spell Committee correctly. I see the English language was secondary only to your greed.

3. We support licensing and improved standards for all originators.

What a concept! Now all of a sudden Brokers and Loan Officers want to jump on the band wagon to support education and licensing! Don?t you think this would have helped the consumer prior to handling their mortgage transaction?

4. We oppose outlawing the way we earn our living, and urge that indirect compensation be allowed as part of the interest rate. Consumers should be able to finance fees and costs and creditors or investors should be able to pay such fees and costs to mortgage brokers as is industry practice today.

I do not have a problem with this, as long as the consumer has been given full disclosure and has been fully explained the benefit or detriment of the Yield Spread Premium or Broker/Lender fees. Give them the choice, not you.

5. We do not support Title III. The standards are so strict and the liability so great that it will prohibit loans being made in the subprime market. It will act as a federal usury statute denying access to credit for deserving borrowers.

Why worry about the subprime market, what?s left of it I mean? Seems we are having a bit of a problem with this one right now. You know what? What does sub-prime really mean? Could it possibly mean ?Not Really Credit Worthy? borrowers? DUH! It?s been a long time in coming; it?s too bad we had to have the Politicians point that out to us.

I honestly think that disclosing YSP is simply confusing to the borrowers. It takes their eyes off of what they should be shopping which is the best terms for the borrower.

Can anyone explain how disclosing YSP for only one class of originators makes any sense? How is this going to help the consumer? Or is it designed to help the bankers?

When I buy stocks, cars, insurance, furnature, groceries, gas, oil, pictures, flowers, cards, pencils or just about anything I never know what the business is making.

Just a few words, It seems easy for me to understand why lenders don’t have the same disclosures as brokers. It’s the banks $. It seems logical a company structured as a pure middleman would suffer more regulation.

Not that I am for eliminating YSP for brokers, obviously not wise. If Congress eliminates YSP and brokers suffer, the whole industry and the customer suffers. Everyone has their place in the market!
http://www.activerain.com/jeffselan

They are throwing in “rent control lite” here, but no one – no one – has even bothered to pick up on it. Everyone’s too busy jawing about YSP and other things in this bill.

Someone (MBA? USFN? Bueller?) had better wake up and realize this bill will require foreclosing lenders to become involuntary landlords on a great many properties that have the misfortune of becoming REO.

I can already see the $100/year leases for a 100 year term, backdated sweatheart deals, or outright forgeries. You think it won’t happen? It already does (in cities with rent control). You think the bank can just ignore the law, as the lease is clearly a farce? Go ahead, and wait for the contingency fee tenants’ rights bar to sue the lender, salivating over its deep pockets. You think the bank can just sue to have to lease invalidated, right? Sure, but someone’s got to pay those legal fees (and eat the carry cost).

This provision carries far more potential harm than toying with the YSP. The YSP is more about how and how much originators/brokers get paid, and is less a consideration in how a bank actually sets its rates. This involuntary landlord stuff will directly impact rates – as banks have to adjust to compensate for the random, and uncontrollable, risk that they’ll get stuck being a landlord.

If this passes, I’m thinking of switching to the dark side. You will be able to make a literal fortune suing the foreclosing lenders for habitability issues once a foreclosure becomes REO. A virtual gold mine.

And, the banks will include that risk when setting their rate sheets. This is a really, really dumb idea. Give tenants a federally mandated 90 day notice, fine. Or, even better yet, create a federal law that requires landlords to notify their tenants in writing when they’ve missed a house payment – and allow tenants stop paying rent when that happens (and strip the defaulting landlord from standing to evict). But, for all that is green and purple in this universes, don’t make foreclosing lenders involuntary landlords.

I agree with Russ that consumers should be looking for the best deal to them, not the least profit to the broker. What they SHOULD do & what they WILL do are likely to be different, however. This could spell the downfall of the good broker & the rise of the “I’ll do your loan for $799 & work out of my house” idiot broker – who will only have access to limited lenders & limited products. It could be a race to the bottom. “$799? Do I hear $699?”… It’ll be the equivalent of picking a lawyer by calling around to see who charges the lowest hourly rate.

You are repeating the same tired line that banks have been using for a long time to confuse regulators. Its really quite simple…If banks can determine YSP when pricing a loan to a broker then they can also determine YSP when they originate it themselves. Either the bank will make a lot of money to hold onto the loan or they will make sell it and make money. If they sell the loan (even after it is closed) I think that is about the same as selling it before it closes.

I still just dont really understand how eliminating YSP would help the consumer.
I also don’t understand how disclosing YSP would help the consumer.

What does YSP have to do with the borrower shopping and getting the best rate, terms and fees?

Ann…whats your point? I understand that this broker was apparently involved in fraudlent activity. What does that have to do with this topic? I assume banks arent involved in fraud. I suggest you ask NY State Attorney General what he thinks about WaMu insisting on not using appraisers that didn’t give them the values they wanted. Thats inflatiing appraisals and thats fraud on a GRAND scale. I believe in a period of months WaMu orded 260,000 appraisals from this firm.

Congress needs to understand that the whole industry needs to be treated the same. How easy they forget that it was the banks and s&ls that created a bigger mess in housing and loans in the 80s. That was a mess the taxpayers had to bail out.

A good thing. Bankers are lenders and take more of the risk.