Oct

24

National Association of Mortgage Brokers Seeks Compromise on YSP

Filed Under Bank Of America, Countrywide Financial, Mortgage News, National Association of Mortgage Brokers (NAMB) 
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The National Association of Mortgage Brokers is hoping to find some middle ground with House Democrats on a provision in a newly introduced predatory lending bill that would ban “incentive” payments to originators, including yield spread premiums that are a broker’s main source of compensation.

All direct mortgage lenders, such as Bank of America, Countrywide Financial, WAMU, receive the same yield spread premiums BUT they DO NOT have to disclose it! Because of loose banking laws, that need to be addressed as well, they are able to hide their upfront profits from the consumer.

“I understand their intent is aimed at incentive payments,” NAMB executive vice president Roy DeLoach said, where a securitizer pays an additional premium for certain types of loans.

The NAMB agrees that incentive payments should be banned. “We want to clarify that an origination fee can be paid by the lender to the brokers,” Mr. DeLoach said. Otherwise, the mortgage brokers will be forced to oppose the bill introduced on Oct. 22 by Reps. Barney Frank, D-Mass., Brad Miller, D-N.C., and Mel Watt, D-N.C.

“The indirect compensation mortgage brokers receive from lenders is a defendable fee that actually lowers closing costs to consumers,” NAMB president George Hanzimanolis said.

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