How do the Banks and Mtg Bankers keep getting exempted from YSP disclosure? Better lobbyists, I suppose.
it has to do with SRP vs future profit of a loan.
I am going to have to go with Patience and select the better lobbyist option. Unknown profit or loss from secondary marketing is a poor excuse. If the lender is paying their rep compensation based on YSP and/or SRP, it should be disclosed.
I have worked for ample lenders that paid commission on YSP/SRP.
The fact that lenders pay YSP and SRP to brokers evidences that YSP/SRP is something that they are able to disclose.
Or is rate sheet pricing that includes YSP/SRP a figment of my imagination?
The issue of YSP disclosure should always be based upon the role of the originator, whether the borrower perceives the originator as an advisor/consultant, and whether there is a real or implied agency. The fact that it is arbitrarily based on whether or not the transaction is brokered is bull. Hence, the lobbyist argument.
I am still curious how mortgage brokers are disclosing YSP options.
_________________ "Two things are infinite: the universe and human stupidity; and I'm not sure about the the universe." -Albert Einstein
Suppose you were an american idol, and suppose you were a member of Congress; but I repeat myself.
-Mark Twain
If a lender can create a rate sheet with YSP, it MUST already know the SRP to be expected...
Chargebacks affect brokers as much as lenders.
It is NOT a level playing field.
As to how disclosed? Brokers in my State MUST disclose a range on the initial GFE, and the YSP may not fall outside that range. I typically disclose 0.000% to 3.500%, because the State has not sufficient wisdom to understand use of YSP to pay "hits" to loan pricing.
I am glad you like the GFE changes because they were mainly to comply with California's Mortgage Loan Disclosure that requires compensation disclosure. On the MLDS, the broker must show the fee and who it is paid to and whether the broker would receive any part of the compensation.
Total compensation including YSP is required to be fully disclosed on the GFE/MLDS with little variance at closing in California.
While the update to Point is good, there isn't a YSP disclosure. The question remains, how are brokers disclosing YSP/discount options and how interest rate can impact cash to close?
After all, YSP must be disclosed by mortgage brokers under RESPA.
shouldnt that disclosure be covered under the "broker fee agreement" disclosure?
Not yet in all States, as YSP is not in the "800's" until a value is assigned as paid to the broker.
I'd still like to hear how other originators are showing borrowers rate and YSP/discount options if they aren't providing an option disclosure.
If HR 3915 goes through, all originators will be required to disclose YSP- not just brokers.
There is also the issue of borrower informed choice and lenders and brokers seeking to curtail fiduciary liability. As agents, advisors, consultants, etc., it is in an originator's best interest to shift the responsibility of the borrower's decision to the borrower by giving them appropriate rate options and disclosures.
Those brokers who operate in non-agency states where there is no state imposed fiduciary duty are not necessarily protected from being held to a fiduciary standard via implied agency or imposition due to brokers or originators actions and/or representations.
As a mortgage broker or originator, if you walk like a duck, and you talk like a duck, you better be prepared to be called a duck. Agency by estoppel, baby.
_________________ "Two things are infinite: the universe and human stupidity; and I'm not sure about the the universe." -Albert Einstein
Suppose you were an american idol, and suppose you were a member of Congress; but I repeat myself.
-Mark Twain
We have had to disclose this for as long as I can remember in Texas. We also have an additional disclosure explaining how we get compensated.
Personally I would love to see everyone else disclose and include SRP. I bet the views of the big bad banks would change when you see how much they are making.
I think it was Friday when BofA was advertising 6.75% plus almost a point in origination for a high FICO, 80% LTV conforming 30 year fixed. I check thier site regular to see what the big bank competetion looks like. My goodness, they must be making 5+ points.
_________________ Mortgage Man in Texas
The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will.
Lombardi
Do_the_math The WhistleBlower
Joined: 14 Mar 2007
Posts: 2058
Location: Groovy Town
We have had to disclose this for as long as I can remember in Texas. We also have an additional disclosure explaining how we get compensated.
Personally I would love to see everyone else disclose and include SRP. I bet the views of the big bad banks would change when you see how much they are making.
I think it was Friday when BofA was advertising 6.75% plus almost a point in origination for a high FICO, 80% LTV conforming 30 year fixed. I check thier site regular to see what the big bank competetion looks like. My goodness, they must be making 5+ points.
I love to see the look on borrowers faces when they realize the relationship between rate and YSP- especially on larger loan amounts. When they realize how much the lenders are really making on no cost loans and the fact that you can get them a lower rate, lower payment, AND have enough YSP credit left over to cover their recurring closing costs/impound account, its a beautiful thing.
I say let the banks hide their YSP/SRP and play their lobbyist game. It makes it easier for me to show the borrower how much better it is to work with a broker. When you throw in the agency/fiduciary advantage, and the playing field is decidedly slanted to a broker that puts the borrower first.
_________________ "Two things are infinite: the universe and human stupidity; and I'm not sure about the the universe." -Albert Einstein
Suppose you were an american idol, and suppose you were a member of Congress; but I repeat myself.
-Mark Twain
poorprocessor C-4
Joined: 06 Jun 2008
Posts: 1038
Location: on a planet far far away..or so I wish
at my previous employer we always disclosed the YSP range on the GFE 1-5%. It was hard coded on the GFE in the system so it always printed at origination. Then at lock the actual YSP would show, LO were supposed re-disclose the GFE and TIL at lock and give the processors a copy. That would happen randomly depending on how good the LO was.
Funny thing was customers hardly ever asked or commented on the YSP..maybe because we did mostly FHA and first time homebuyers and they didn't know any better. Maybe as long as they thought they were getting a good rate they didn't care or in some cases they were probably just thankful to get a loan at all...
I have no clue what the standard market YSP is but I rarely say anything over 3% (our LOs had a minimum to make to get paid) and it was usually around 2%-2.5%
_________________ I'm leaving for Mars in the morning!
I have no clue what the standard market YSP is but I rarely say anything over 3% (our LOs had a minimum to make to get paid) and it was usually around 2%-2.5%
Was the 2%-2.5% front and back combined or only back end YSP???
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