Brokers are in shell shock over the new RESPA and GFE and the fear that human error is going to cost them big if they misquote a fee. And then with the DRE national registry and new NMLS&R about to pull originator’s credit over the next year, there is another level of panic on whether personal financial issues are going to result in licenses being pulled. Does the medical profession require that a doctor be of great health for the last year in order to practice medicine?”
Many argue that we are in the midst of “irrational regulation, when it is the mission of seemingly every state and federal legislator to do something to make sure a credit crisis like this never happens again. Certainly originators, especially multi-state, anticipate an increase in cost of doing business, whether it is in upfront compliance or in buybacks continuing for years, that will have the unintended consequence of higher rates and fees to the consumer.
Confused about Yield Spread Premium? Join the crowd, but it seems that going forward brokers cannot simply receive YSP. It is generally agreed that brokers have to show the origination fee on the GFE, and then show that using some/all of YSP the broker “offset” that origination fee in addition to any processing, underwriting, and other miscellaneous broker fees. If there is more YSP then total broker origination fee, a portion of the YSP goes back to the borrower and cannot simply go directly to the broker.
We have heard for some time about the change that was imminent. Some prepared for the change with webinars, classes, luncheons, and reading material. Some have actually made an attempt to embrace the change while other’s truly cringed at the notion that this was inevitible, and thought it may just blow over and life would go on. NOT HAPPENING. Its here. It should be looked at as a positive in many respects. If you a true professional in this business and are prepared to change with the times, then great. Please realize that this will benefit many old schoolers, due to many newbies, or less than desirable in the industry will drop by the way side. They wont embrace the change, or will find it too cumbersome to overcome or deal with. So……once again……the industry will tighten up and get a little leaner. Not such a bad thing. Also the lenders are already finding ways to “bundle” fee’s, & make life a little easier in the transition. I expect title/escrow offices are doing the same. Hang in there folks…….its not the end all.