We should be very grateful that the Fed officials don’t have to worry about re-election and pandering to the uninformed. Instead of running around characterizing lenders as evil just to suck up to voters, the Fed actually did a little homework. And in its study the fed discovered that, gawrsh, consumers actually don’t give a rat’s, um, tail, about YSP as long as they can shop and feel confident that they are getting a fair deal. And the fact that 85% of them choose loans with YSPs so they don’t have to come in with cash out of pocket speaks for itself.
Funny, the best LOs get that way by listening to their clients and looking at facts — not just pulling off a dog-and-pony sales job. Now if our leaders would put down the puppies and call off the ponies before signing off on a mortgage rescue plan, we’d all be better off. Thanks again, Fed.
No Kidding! people could care less about YSP. All they want is a good deal, regardless of how they get. I am the kind of person that if I am doing business with someone and they do a good job for me I want them to get paid! I want them to be compensated for how they have made a difference for me. there is nothing wrong with mortgage professionals getting paid.
That’s definitely welcome news Gina.
Thanks Ben!
(Ben returns to his B-52 for continual helicopter drop$$$$)
BTW how can I get more information on this?
Quotes and Sources (just the facts, ma’am)
“For now, the Fed decided not to ban incentive payments given to mortgage brokers — known as yield-spread-premiums. Critics say these payments give mortgage brokers the incentive to charge higher fees with no benefit to the consumer, while supporters say it’s a legitimate way for borrowers to spread out mortgage broker fees over the life of a loan.”
http://www.businessweek.com/ap/financialnews/D91TRAFO0.htm
“In a nod to the brokerage industry, the Fed withdrew a proposal requiring additional disclosure of the “yield-spread premium,” which allows banks to pay brokers for steering homeowners into higher-priced loans. After testing consumers, the agency found that the rule would likely not be effective. But the Fed said it would continue reviewing the issue.”
http://money.cnn.com/2008/07/14/news/economy/fedrules/index.htm
Gina:
Notice how YSP is characterized in the article.. “pay brokers for steering homeowners into higher priced loans.” For the life of me, I wish someone would just ask these numbnuts if they know the difference between wholesale and retail? I really want to know when consumers “qualified” for par rates?
Is there a Mortgage crysis???
Hmmmm
http://www.fruitmortgages.com
You think THOSE were bad? Here’s one from a very enthusiastic (as long as she doesn’t have to fact-check) reporter from the San Jose Mercury News:
“During the subprime lending boom, some brokers earned huge fees from lenders for steering some borrowers to high-cost loans when they could have qualified for lower rates and better terms. The Fed said it will review alternatives that would prevent excessive broker fees.”
If we did our jobs as poorly as these epeople we wouldn’t even have them.
here in germany the EZB dont know what to do – because inflation > 3% and need of liquidity.
lets see what we see for results for Q2 this month.
Im so glad that the Feds actually listened, it really takes a lot for them to listen. Im not sure they know how to listen. Either way its not the broker makes its what the buyer of the loan is willing to pay.