Well, I certainly do not support the elimination of using YSP for brokers!

There are many legitimate reasons for brokers using YSP, that do not involve worsening the borrowers situation. It could take an entire post.

And remember, banks and correspondent lenders receive YSP (for rates above par), but do not have to show it to the consumer.

The beauty of having YSP, and showing it, is that it exposes any “indirect” compensation, and possible conflicts of interest.

Anything that weakens the wholesale channel’s ability to effectively serve borrowers, will make banks and the retail channel more profitable, and eventually cost borrowers more money, by eliminating choice and effective, efficient competition.

Let’s continue to expose the abusers, support the honest and ethical practitioners, and maintain as great a variety of choice for consumers as can be safely managed.

I just received an email from someone on the east coast who ripped me a new one regarding something else I wrote about the mis-use of yield spread premiums. She gave me the old NAMB party line about how YSPs are used for good purposes, etc. Well the link you just posted is a PERFECT example of why brokers and LOs will probably lose the ability to earn income via YSP. Thanks so much for keeping us up to date on this sorry case.

They are taking apart that debacle, but slowly.

http://www.dfi.wa.gov/CS%20Orders/C-08-195-08-SC02.pdf

My sympathies for your confusion. It has been a confusing year

1. Laws change all the time in all professions. If we want to be professionals, we must study, and keep up with the changes. If it was easy, we would be paid like clerks at Best Buy….

2. Many people that are in positions of responsibility (mortgage brokers that hire or supervise loan originators) are shockingly mis-informed, and have passed on that mis-information to loan originators. Whether they have done so out of ignorance, or greed is subject to debate. Your only sufficient defense is to accept the responsibility to learn the rules for yourself.

3. The federal government has (up til this past summer) shown GREAT reluctance to establish updated and coherent lending standards (and great lobbying resistance), so it has been left to the states to make the best reforms as they see fit.

This is similar to many of our national problem areas (health care, education, immigration, environment, energy, business regulations), that the federal government has intentionally ignored.

I guess we should be thankful that we have strong state’s rights to innovate on behalf of their citizens.

Stay curious, stay involved.

Good Luck!

There is education available for mortgage brokers and LOs to take prior to taking the exam. I’ve been teaching these classes for many years.

From my experience, without a state or federal mandate, LOs and brokers simply choose not to attend.

In terms of where the broker fee goes on the GFE and HUD I, this information comes to us from RESPA, which has been around since 1974.

The MBPA simply re-states what RESPA already gave us.

The new mortgage licensing law that was signed by Pres Bush on July 23, 2008 will mandate that all LOs become licensed under the NMLS.

I WAS TOLD BY AN AUTHOR OF THE MORTAGE BROKERS PRACTICIS ACT FOR WA STATE ( NOW USED BY 20 STATES), THAT IT WAS DESIGNED FOR MORTGAGE BROKERS TO FAIL!,
And thats whats happening now, the indsutry is full of Fore Closures, due to laws with to many loop holes in them.

The who industry should of united, and became one like the Realestate Industry did with the National Association of Realtors, fight for peoples rights as Home owners, and stupid gov officials try to take them away.

Example:

When i started in 1992 we charged Loan fee and Discount fee and ysp. I was told it was correct and okay.

6 yrs ago, I was told different, as a broker the fee had to be charged as a Loan Orgination FEE.

Couple Yrs later new broker told me it had to be charged as a Loan Originaiton fee.

This yr I was told if you Bank the loan then its a Loan FEE, and if your Broker it its a Broker FEE.

All the people were my brokers and were suposidly up with the laws and new people with WA ST. DFI on first name baises.

When you take the state test TO GET LICENSED WITH WA STATE DFI, WHAT IS THE POINT IF THEY GIVE YOU THE ANSWERS FOR THE STATE TEST, AND NOT HAVE A STATE APPROVED COURSE ON WHY THE ANSWERS ARE WHAT THEY ARE.

AT LEAST IN REALESTATE WE HAVE TO TAKE A 60 CLOCK HOURS COURSE AND THE INSTRUCTURE EXPLAINS EVER THING TO YOUR TO BE EDUCATED LIKE ALL OTHER REALTORS/AGENTS.
And they have 30 clock hours every 2 yrs to stay up with changes.
DFI has not had any interest in that till the last couple yrs. Its still very minimal.