I do not completely agree with eliminating the brokers ability to charge a rebate. As small to moderate sized business owners, most brokers use the rebate (YSP) to pay for office and marketing expenses, giving their agents a percentage of the origination. There are many other reasons brokers have to be able to charge rebates, some of which are valid and others of which are just ridiculous. The botom line is that the broker is the broker, and as a middle man between the lender and the client, should be able to negotiate rates and terms that most benfit the client and his orgnization; finding a medium between the two.
However, the problem arises when brokers take advantage of the ability to be able to charge a rebate and start to rip off clients to the point where its not beneficial to them anymore... It becomes totally in the favor of the broker... but then, on the other side of that equation, and as we all know, as the rebate goes up... the rates go up, so at some point the client should be able to say "No"... but then another arguement might be that some salesman are just good as He!!, or slick as He!!, whichever way you want to look at it, and persuades their clients into taking whatever loan they present...
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Unfortunately I have not had the time to completely read and analyze the bill... But I will as soon as i get the opportunity...
However, the fact of the matter is that it needs to be limited, most of the reason for these horrible market conditions is because of things we have done to ourselves... the greed that has consumed the majority of mortgage professionals, who, in today's market are under-educated, glorified salesman... The boom overpopulated the industry with these people who hop around from job to job trying to make money anywhere they can, with no realization or concern for actual industry stability...
Brokers say they want to keep the option of charging a YSP, well stop abusing it... Lets take a step back and analyze how we got oursleves in this whole...
Agents abuse the ability to charge a YSP because they are not skilled enough to sell themselves as an actual professional, and charge the money they deserve up front... THey either can't convey the client benefits, are charging too much, putting the client in a program that does not really help their future financial position, or are just greedy and want to charge as much as possible... I learned really quick in this industry that their are two type of agents, the ones who rip off their clients and as a result are always in need of new ones because they et no referrals, or the ones who find a medium in between their personal financial needs and their clients, and charge just enough where they are happy and their clients are still benefiting... Those are the ones who get referrals and will make it through these tough times because they built customer loyalty and create a trsuting relationship... I mean it sounds all like book work , BUT ITS ACTUALLY THE TRUTH...
Going back to how we got in this market... It's simple, the agents max out the YSP using it as a way to hide their true earnings, whcih directy effects the interest rate the client recieves... It shoots it through the roof... then the payment goes right along with it, and before you know it, that Stated/Stated loan that you were doing, where you kind of inflated the income and the assets to get the borrower approved, knowing that they would probably barely be able to afford the payments, and were just happy to get approved for a loan after shopping around everywere else, has now been put in a situation where they are really not going to be able to afford the payment because their actual DTI is way too high... Then they default on their payments, and guess what... we get an epidemic... then we get record numbers of people defaulting on their loans, and finally, we get in this market that we have today...
To hear more on waht i have to say and otehrs like me, take a look at
The good thing is that this will weed out the losers that can't sell and are confused about the purpose of a broker, to negotiate a better than retail deal that benefits the client... And with the DRE making it harder to get a salesperson license, the future of industry doesn't look so grim....
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