home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News


Mortgage News

HOT Topics









site map

twitter linkedin
facebook google+

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

Yield Spread Premiums
Yield spread premium issues, studies and lawsuits. Mortgage wholesaler YSPs paid to mortgage brokers.

Brokers, Bankers at Odds Over YSPs

Brokers say disparity will drive them out of market

March 13, 2008


Mortgage bankers support recommendations announced today by the Bush administration to increase regulation of mortgage brokers and are calling for better disclosures of yield spread premiums paid to brokers. But mortgage brokers are warning that they will be driven out of the market if banks and lenders aren't forced to make the same disclosures.

The President's Working Group on Financial Markets released recommendations about how to avoid another credit crisis. The report, Policy Statement on Financial Market Developments, based its recommendation on an analysis of what led to the turmoil.

The current problems began with a dramatic weakening of subprime underwriting standards in 2004 and was enabled by originators, underwriters, ratings agencies, investors and investment bankers.

"Originators, underwriters, asset managers, credit rating agencies, and investors failed to obtain sufficient information or to conduct comprehensive risk assessments on instruments that often were quite complex.," the report said.

A subsequent loss of investor confidence led to a seizure in the structured finance markets.

Among recommendations from the group -- which include the Treasury Department, the Federal Reserve Board of Governors, the Securities and Exchange Commission and the Commodity Futures Trading Commission -- are the implementation of strong nationwide licensing standards for mortgage brokers, oversight of mortgage companies that is consistent between states and the federal government, and more thorough disclosures.

Mortgage bankers support the groups recommendations.

"We agree with Treasury's recommendation that mortgage brokers should be held to stronger licensing and enforcement standards and that stricter safeguards against mortgage fraud should be put in place," Mortgage Bankers Association Chairman Kieran P. Quinn said in a statement today. "Furthermore, we agree that borrower disclosures, including a better disclosure of mortgage broker compensation, are critical."

But mortgage brokers disagree with mortgage bankers.

In testimony before the Small Business Administration's Regulatory Fairness Board, National Association of Mortgage Brokers President-elect Anthony Atkins said he was concerned about the disparity in disclosures required for broker compensation and mortgage banker compensation, according to a transcript of his prepared remarks yesterday. He noted that these disparities could worsen based on rulemaking efforts by the Fed and the Department of Housing and Urban Development.

"When consumers shop for a mortgage through a mortgage broker, they are presented with a disclosure highlighting the mortgage broker's fee," Atkins explained. "When shopping at banks and lenders, consumers receive no similar disclosure."

He cited studies from HUD and the Federal Trade Commission that indicated prospective borrowers have more trouble determining more affordable loan programs when only broker compensation is disclosed. He said the poor comparison leads loan applicants to choose more expensive loans.

"Without any requirement for mortgage lenders and bank loan officers to disclose their financial interests in a mortgage transaction, mortgage brokers will be driven out of the market completely," Atkins stated. "Consumers will face higher costs and fewer options when shopping for a mortgage loan."

NAMB is also unhappy about the a recent agreement between the Attorney General of New York and Fannie Mae and Freddie Mac that will ban brokers from ordering appraisals -- which Atkins said amounts to a tax on borrowers.

He explained that appraisals ordered by mortgage bankers are worthless if a borrower chooses to go with another mortgage company. But appraisals ordered by brokers enable applicants to shop for the best deal without having to order new appraisals.

Sam Garcia worked in mortgage lending for twenty years prior to becoming publisher of MortgageDaily.com.

e-mail: [email protected]

Mortgage Broker News | Originator Newsletter
Stories about mortgage brokering and broker programs. Profiles of successful mortgage brokers. Articles about mortgage brokers who excel at other activities. Broker lawsuits and criminal broker activity.

Political Mortgage News | Mortgage Laws
Mortgage people in politics. Political contributions by mortgage companies. Coverage of political support by lenders and executives. GSE lobbying and issues.

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter


mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders