I am a broker and the elimination of yield spread premium is the equivalent to Lowes or Home Depot adding no mark-up to me for tools or household goods in excess of their costs from the venders supplying them with these products. YSP embodies the very concept by which our economy is built, across the board for all industries in retail or wholesale. Why stop at mortgage originators, when we can just ask consumers to pay costs at all retail chains, with no regard to what ex. above, Lowes or Home Depot has to pay in expenses for location in order to make available the products that we need?
The fact of the matter is, the predatory lending percentage cap of 5 is the fail safe already put in place to govern this sort of inflation. It would only make sense to lower this cap across the board to 4 or even 3 halves, rather than another "knee jerk" reaction to loan defaults, which will ultimately clean the market out, by taking out the compensation methods allowing people to be experts in their respective industries.
The snow ball effect will be less available loans for lenders whom rely on the brokers spread out nationwide to feed loans to service with-out the overhead of branches etc.. When there are less loans available, there will be less borrowers. When there are less borrowers, there will be less sold homes. When there are less sold homes, there will be much less appreciation, making it increasingly less likely for the holder of a mortgage, to recoup the liability left behind by foreclosure's. Shall I continue? Great bill, they really put a lot of thought into that one!
Hello,The beauty about this story is that I have hundreds and every other mortgage broker has hundreds and the borrowers are of all shapes and sizes. I use YSP for just about every borrower from the most wealthy to those that aren't so wealthy, young and old, urban and suburban, the use of YSP is critical to my business. It is a tool that helps borrowers pay less fees or no fees, and that helps all borrowers. All politicians need to do is find anyone of millions of borrowers who benefitted, unknowingly usually, from YSP and employ them in a sophisticated media campaign.
I wanted to have your attention and tell you my story because I have first hand knowledge with Yield Spread Premium. Currently, a number of Democrats are trying to propose a bill that will eliminate my mortgage broker's ability to charge me YSP. While this sounds like a good idea, I have first hand knowledge of how YSP benefits me. A few years ago I got into a bit of financial trouble and missed a mortgage payment. In the aftermath, I had to refinance to pay off bills and past due taxes and was forced to take a rate higher than I liked.
I have since gotten my finances in order and have been perfect with all my payments for well over a year. I am about to get married and I am looking to sell my home within a year. Knowing all of this my mortgage broker was still able to find me a loan that benefitted me even with my short time frame. Because my credit is much improved he was able to lower my payment by over one hundred dollars a month AND pay for my closing costs. By doing this I not only enjoy monthly savings at a time when I have much more important places for the money, but I paid absolutely no costs to do it. That is important because paying costs makes no financial sense if I do sell within a year. My broker was able to do this because of YSP. He was able to increase the rate enough that not only was I still saving over one hundred dollars a month, but the YSP paid for my costs. Please don't let the Democrats take away this ability. It helped me and it helps millions of others get the mortgages they want and need.
We are ready and we are serious. All we are looking for is political allies, and for those allies we have millions of stories of regular folks who were helped by YSP. Folks that would pull at heart strings just as well as Graeme Frost and they will all expose these three Congressmen (Watts, Frank, and Miller) as well as their entire party for the totalitarian, demagoguing opportunists that they are.
Mortgage brokers may be facing extinction. The U.S. House of Representatives Financial Services Committee is considering a bill that will fundamentally change the way we are paid. While we agree that consumers should not be steered into a particular loan, the bill leaves unclear whether consumers can finance their origination fees and other costs inside the interest rate. Therefore, it is unclear whether you can be paid YSP. Additionally, we fear that all subprime lending will cease to exist due to the increased scope of the high-cost mortgages section (Title III) of this bill.
We are calling upon our members to respond as never before. To save our industry, we are asking you to IMMEDIATELY contact your Congressman.
TIME IS CRITICAL. The bill became public last week. We have been working with Congressional offices in good faith, but our concerns have not been fully addressed in the newly, revised version released just hours earlier today. The U.S. House of Representatives Financial Services Committee will be debating and voting on this bill on the morning of Tuesday, November 6, 2007.
YOU MUST ACT NOW.