Ill be expanding on this topic, already having amended my previous post, sans reading the Bill proposal in it’s entirety.
Let me clearly state that I’m not a proponent of this Bill at all, for a number of reasons, most specifically:
No amount of legislation from the folks in Ivory Towers is going to ‘fix the mortgage problem’.
Mortgage law MUST transcend and apply to both brokers and bankers, otherwise it’s a total f*****g joke.
While 3915 can be construed as an attempted land grab by Big Business (BB), an election year political spin topic, and a number of other scenarios that involve ‘The Man’ holding the little guy down…the glaring omission from these conspiracy theories is that of general ignorance by the status-quo within the mortgage broker industry when it comes to their own industries law.
Why am I still shocked at the ignorant short sighted opinions of the many mortgage professionals who are putting their views out there? I’m inclined to make examples out of specific people, not to bash them for my gain, but to help them understand that they’re part of the problem, part of the reason a Bill such as 3915 gets as far as it has.
For example, I’ve been in more than one heated debate about Yield Spread Premiums (YSP’s) over the past few years. In no argument have I ever lobbied for their elimination, rather for their proper disclosure, because if they are not DISCLOSED PROPERLY they are a kickback and illegal under the Real Estate Settlement and Procedures Act. You’d a thought I shot someones mother when I made the above linked post on Active Rain.
Clarification regarding the use of YSP from HR 3915, (Italicized text is directly from the original document):
- It doesn’t propose to ‘ban’ Yield Spread Premiums:
No mortgage originator may receive from any person, and no person may pay to any mortgage originator, directly or indirectly, any incentive compensation (including yield spread premium) that is based on, or varies with, the terms of any residential mortgage loan.
This has been the law for like, ummm, 30 f******g years…?
Here read Section 3500.14 of Regulation X. Better yet, let me pull out a specific clip:
No referral fees. No person shall give and no person shall accept any fee, kickback or other thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or part of a settlement service involving a federally related mortgage loan shall be referred to any person. Any referral of a settlement service is not a compensable service, except as set forth in Sec. 3500.14(g)(1). A business entity (whether or not in an affiliate relationship) may not pay any other business entity or the employees of any other business entity for the referral of settlement service business.
Someone didn’t just make this shit up last week, it’s been the law for a long time people. If you’re a mortgage professional and still think it’s kosher to state something along the lines of ‘YSP is something a lender pays me for…’, you’re an idiot.
I also hear many mortgage professionals saying the passage of this Bill would crush the mortgage broker, the little guy. For the most part, yes, it would. When are those same people going to wake up and realize that times are a changing have changed, get off their ass, stop playing armchair mortgage jockey, get some actual business sense and evolve??? Grab a whole of your industry before someone, through a Bill proposal like 3915, does it for you.
If anything positive comes out of HR 3915, it should be an industry’s head out of its collective ass.
No one likes to hear I told you so but…Also See:
Three Questions to ask Any Mortgage Professional
Mortgage Interest Rate Pricing The Disturbing Truth
The Mortgage Brokers New Clothes
The Mortgage Industry’s Internal Civil War
The Need For Transparent Mortgage Rate Search
Mortgage Pin Nears Housing Bubble
