| It is unfortunate that an institute like Harvard is also put on the line by incompetent educators. One would expect an indication of a certain amount of research on the subject by the author. Is it not interesting that she quotes a Fannie Mae vice president about ysp. Why not state the name so we can verify the source? May be she herself received benefits from writting this article? Nobody else would make such inaccurate statements. |
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| Above Posted By:
Robert
| Wed, 21 Nov 2007 17:09:29 EST |
| Unfortunately there was invasion of uneducated, greedy loan originators when the housing market boomed in 2004 and 2005. Consumers were blinded by the prospect of rapid appreciation and didn't pay attention to the potential long term commitment of a mortgage. Any one off the street could originate a loan. The slow down of the housing market has chased the rotten apples from business. Her comments are outdated and ignorant. In today's tight mortgage market, a broker's value is without limitation. |
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| Above Posted By:
SCOTT
| Fri, 26 Oct 2007 15:13:41 EST |
| I didn't realize that Harvard Law had such ignorant professors! |
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| Above Posted By:
JD Rawcliffe, Esq.
| Fri, 19 Oct 2007 22:05:29 EST |
| I think those who are upset about YSP being paid to a broker by a lender really dont understand how little a rate needs to be increased for the broker to be paid. I'm looking at todays rates with a lender I use often and I can offer a rate of 6.125 with the borrower paying 1 point up front or I can offer 6.375 with no point. Its the borrowers choice, you can do 6.25 and pay a 1/2 of a point for all I care its a better deal than you can get at your bank. This professor Warren chick is a fool |
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| Above Posted By:
CTAN
| Thu, 18 Oct 2007 23:03:57 EST |
| It upsets me to see a story with so much inaccurate information published. While mortgage fraud is a concern and should be prosecuted, YSP is legitimate compensation that is FULLY disclosed to the borrower upfront on the GFE and at closing.
It is a tool to reduce costs that would otherwise be born by the borrower and is already regulated and limited with other fees. Mortgage brokers receive more regulation, licensing, education and provide greater disclosures than required by most banks. |
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| Above Posted By:
Roland
| Thu, 18 Oct 2007 20:55:29 EST |
| I find it hard to believe that after 30 years in the mortgage industry Bob S. thinks lawyers are the unscruplous ones? I have investigated mortgage fraud for the last 11 years, and 2 out of three cases I see are broker related, not borrower, not attorney.... Ask anyone who works mortgage fraud in this industry as to who initiates the fraud and see what answers you get. |
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| Above Posted By:
Anonymous
| Thu, 18 Oct 2007 10:12:39 EST |
The buyers were threatened by the builders with their large deposits and thrown into crazy loans. Once the housing market started to faulter, the builders who long since made their money through the sale of the home AND the mortgage could afford to dump prices sometimes up to $100,000.00. What did this do to the others who purchase and then were transferred a year later, needless to say all the other homes in the area. The trickle down affect has been horrible.
Take a look at the subdivisions where new homes have closed in the last 2 years. How many of these are builder financed, now take a closer look? How many of those builder financed homes are in foreclosure? The builders have a very strong lobby because the employ so many people. Is this the reason this is not being looked at closer? |
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| Above Posted By:
Natalie
| Wed, 17 Oct 2007 14:55:13 EST |
| I have listened for months about mortgage brokers and banks actually being the culprits of the housing industry upset. Why has no one said anything about the builders who, have their own mortgage companies. Took great advantage of the housing boom, future priced homes they were selling. Taking deposits and offering financing terms at the time of contracts that were not what was presented to the buyers prior to closing. continued... |
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| Above Posted By:
Natalie
| Wed, 17 Oct 2007 14:53:57 EST |
| YSP is symptomatic of larger problems within the RE/mortgage lending industry. And clearly, a vast majority of the brokers responding to this article don't get it. If you are in a fee for service business that fee should be borne by the party paying for the service. YSP muddles the clarity of the service and calls into question who the broker serves. Making loans where buyers closing costs are paid out of YSP is in many cases a fraud against the lender not charity. All parties share blame. |
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| Above Posted By:
Arthur dArrigo
| Wed, 17 Oct 2007 14:28:32 EST |
| Those that can...do, those that can't...teach. And those that can't teach write op/ed pieces for major newpapers looking to draw attention to themselves. Shame on Ms. Warren!! |
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| Above Posted By:
Rex Lawler
| Wed, 17 Oct 2007 08:03:25 EST |
| There is no way a broker would stear someone who qualifies for a prime loan to a subprime loan. Prime lenders pay much more YSP than subprime lenders and that's the way it's been for many years...at least in my state. If greed is the motivation, I'd put the borrower in a Prime loan any day.
Make $750 to give someone a prime 6.875% rate or get $375 to give someone a sup-prime 10.875% rate? No brainer! |
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| Above Posted By:
Wade
| Wed, 17 Oct 2007 07:47:17 EST |
| I work at a title company and often times the YSP is the only way a broker can get paid, many borrowers can't afford to pay a dime in upfront fees. The broker sometimes pays all the fees from the YSP. We have closed loans that made only $86 net profit to the broker. Is that greed? I think it was charity. |
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| Above Posted By:
Matt
| Wed, 17 Oct 2007 07:40:27 EST |
| Professor Warrens was right on the money. The loud din from the mortgage hacks only fortifies my low opinion of that crowd. I dont think she went far enough though. Its not just the former used car salesman mortgage brokers that are at fault. The big box banks are just as bad because they indeed are the ring leaders in this scam. |
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| Above Posted By:
andy
| Tue, 16 Oct 2007 03:32:03 EST |
| Wow... Even if I max out up front points on the front, maximize my YSP to the legal limit on a $417,000 loan and divide my commission split of that by the hours of work I've done for the customer, then I think I end up somewhere in the $125 per hour range. Fair money if your saving $500 per month on your new loan. Now let's compare $125 p/hour to my last retainer agreement for an attorney which was $300 p/hour. Oh yeah, I only charge fees if I succeed for them, not fail...So who's the real crook? |
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| Above Posted By:
Anonymous LO
| Mon, 15 Oct 2007 17:19:29 EST |
| As a 30 year veteran of the mortgage industry, the only unscrupulous people tied to our business are the lawyers, many of which are taught by this person, to find ways to sue legitimate companies on technicalities and take millions of dollars in fee's. How about you attorneys taking 1% on what you win in litigation, instead of the 30-50% you actually take. It's like "the pot calling the kettle black". |
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| Above Posted By:
Bob S
| Fri, 12 Oct 2007 15:03:35 EST |
| Fantastic article by Professor Warren. The G R E E D of brokers and loan originators is astonishing. |
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| Above Posted By:
George S.
| Thu, 11 Oct 2007 20:04:23 EST |
| As a wholesaler of Alt-A and A paper mortages in CA, it is remarkable to me that so-called "industry expert" Elizabeth Warren is given column space in a well-know and respected newspaper, and actually paid to write about a topic - in this case YSP - that she obviously doesn't understand. I say "boo" to her and her inciting and patently false analysis. |
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| Above Posted By:
John
| Thu, 11 Oct 2007 14:22:52 EST |
| I work for a lender and I am PAID by the yeild spread.....
90% of customers do not want to pay an orgination point. I offer customers the rate with and without a point. The lending business is very competitive I don't know anyone who can afford to work for free. We are here to help the customers find the best rate and to make a living. I can't tell you how many home equity loans I have closed in Texas that I made 250.00 not 1000's of dollars....... |
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| Above Posted By:
angie
| Thu, 11 Oct 2007 12:39:34 EST |
| As a broker we are in a catch when it comes to compensation. We either charge the customer or get YSP. If the customer doesn't want to pay fees then we can adjust the rate of the loan to be compensated by the lender. This adjustment is NEVER the 3 pts used as an example in the article. We do have to get paid somewhere. We don't work for free. Maybe we should have a standard fee equivalant to the fee charged by real estate brokers,that alone would make alot of mortgage brokers real happy. |
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| Above Posted By:
john
| Thu, 11 Oct 2007 11:04:04 EST |
| Great story. Want more confirmation as to the problems that have caused this, soon to be economic crisis, Vist Appraisers Forum. Appraisers, RE Agents, Mortgage Brokers, Lenders, Wall Street ALL had a part in creating this crisis. Those in the forementioned fierlds that TRIED to be honest got slamed & lost work because of honesty & ethics, These are the ones that should be applauded cause they would not bend. However they'll be rolled into the blame with the rest. |
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| Above Posted By:
Appraiser
| Thu, 11 Oct 2007 11:01:37 EST |
| Mortgage Fraud expert and activist (and co-author of the new book, "Protect Yourself From Real Estate and Mortgage Fraud"), Ralph Roberts, has some thoughts on this as well. Earlier this week, on his "FlippingFrenzy" blog, Roberts wrote:
"My conservative estimates target fraud as being responsible for at least 80% of the problem, and most of this fraud was perpetrated by industry insiders (both in the Real Estate and mortgage loan industries) on the consumers."
Everyone should read it. |
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| Above Posted By:
Anonymous
| Thu, 11 Oct 2007 10:27:44 EST |
| (YSP)
This is payment made to the broker by the Lender for doing business with the Lender. This has nothing to do with Points. As you know the Mortgage Industry is very competitive and in order for us brokers to keep sending files to one Lenders we need to be compensated. This is not the cause of the mortgage meltdown. The meltdown was caused by sellers wanting too much for their properties and buyers wanting more than they could afford. (Supply and Demand) |
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| Above Posted By:
Lucy Evei
| Thu, 11 Oct 2007 09:22:17 EST |
| In my 30 plus years in real estate I thought I'd heard it all. Being lectured on ethics by a lawyer is like being called ugly by a rhino. The Fed's policies, the big banks greed, all vanish as the independent brokers take the hit for the unscrupulous few. Want to solve the problem? Have consumers pay the fees directly, and upfront Maybe a retainer. Its been tried before. Guess what? The "something for nothing" crowd comes out swinging.There's no free lunch. Get over it. |
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| Above Posted By:
george
| Thu, 11 Oct 2007 09:13:27 EST |
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