New Compensation Rules are Effective and the World Has Not (Really) Ended
As I have written previously, the new mortgage broker compensation rules (provided by Regulation Z of the Federal Reserve) went into effect on April 1, 2011. These rules have the effect of controlling (though not necessarily limiting) the compensation that lenders can pay to brokers. They also affect how the mortgage brokers can pay their employees, specifically, loan officers and branch managers.
One of the restrictions is on "Who" pays the mortgage broker. In the past, a mortgage broker was paid by the lender or by the borrower or by both of them. Now, under ...
New Broker Compensation Requirements Are Coming (Part 1)
If you think it is confusing now to get a mortgage, just wait a few weeks when the new requirements under Dodd-Frank go into affect. At that point, borrowers and brokers will need to decide how a broker gets compensated. The choices will be (i) through the lender or (ii) by the borrower. Now, of course, at first blush everyone wants to rush to say pay should be from lender. And, in the past, that would have been true.
However, as Dodd-Frank is attempting to level the playing field (in a clumsy, inartful and what I believe ultimately will be unsuccesful attempt), ...
Seminar on Federal Mortgage Lending Laws for Lawyers & Real Estate Professionals
I am pleased to inform you of an upcoming seminar I will be speaking at. I think this program will be of particular interest to you and I would like to personally invite you to attend. As my guest, you are eligible for 20% off the registration fee!
Complying With Federal Mortgage Lending Laws
April 13, 2011
New York, NY
Hilton Manhattan East, 304 East 42nd Street
http://www.lorman.com/seminars/seminar_details.php?sku=387281
Register online: http://www.lorman.com
Call: 866-352-9539
Discount code: F2716129
Priority code: 15000
For Those About to Refinance, WE Salute You (with apologies to AC/DC)
For those who waited for the rates to drop further or tried to time the market, the ship has mostly sailed. Fixed rates are now .5% higher than they were a month ago. However, if a refinance still makes sense with rates in the upper 4s on 30 year fixed or low 4s on 15 year fixed, you ought to jump now before rates go higher. See below.
30 year-4.75% up to $417k
30 year-4.875% up to $729k
30 year-5.125% -$1M
15 year-4.25% up to $417k
15 year-4.375% up to $729k
5/1 ARM-3.875% (up to $417K)
5/1 ARM-3.5% up to $1.0M
7/1 ARM-4.125% up to $800K
7/1 ...
Why Outlawing Yield Spread Premium to Brokers is a Bad Idea
Making it illegal for mortage brokers to get paid YSP (or Yield Spread Premium) from lenders (which is how we get paid on0 point loans) is a pet product of our legislators. They wrongly believe that this will bring down the cost of borrowers. However, if they do prohibit banks from paying mortgage brokers directly, it would have they EXACT opposite effect of what they desire (more disclosure and better rates for borrowers) as a result. All that would occur would be the already decimated mortgage brokerage industry finally "breaking" since it is mostly populated by ...
Fannie Mae prohibits lenders from “Appraisal Cutting”
Many lenders over the past 2 years have reduced the value of the appraised value of homes after reviewing the appraisal report. They did this if they disagreed on the value that the appraisal indicated in the report. This practice is known as appraisal cutting. The underwriter, who never saw the property and usually was hundreds (if not thousands of miles away) and was not familiar with the area either substituted their judgment for the judgment of the appraiser or used automated valuation models to do so.
In a bulletin from June 2010, Fannie Mae is prohibiting ...
Mortgages And Wall Street Financial Reform Act
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Changes to Good Faith Estimate Coming January 1, 2010
Homebuyers should be prepared for major changes in the timing of mortgage approvals and closings starting after New Year's Day. Due to recent legislation passed by Congress with the intent to further consumer protection, lenders and mortgage brokers will be required to provide more accurate Good Faith Estimates to the buyers. These GFEs will be required to track the costs at closing set forth on the Hud-1 Settlement Statement.
As a result of these changes, certain charges will not be permitted to change at all from those disclosed on the Good Faith Estimate. ...
