A letter to your Representative...

Another Letter in response to the YSP Bill that was introduced.........


September 20, 2007

Dear Darrell Issa,
I am writing you, a registered and active voter, in response to HR 3615 and the absolution of YSP for licensed brokers. To put it simply this bill is a mistake, and in my professional opinion does not address the real problem in the lending industry – namely unethical people in the industry taking advantage of consumers.
Let me expand on this point. With a simple CFL license, and a single tradeline, I would be, what is known as a correspondent lender, and able to make YSP according to this bill because banks and correspondent lenders are not obligated to disclose rebate or YSP, while brokers under current law are required to do so. This means I would be able to hire an unlicensed sales force, with absolutely no training or back ground in real estate, to sell mortgages to the consumer with a YSP - unknown to the consumer, while licensed brokers who are state certified could not, even though they are disclosing the YSP on their good faith estimate from the start. Is this really helping to stop predatory lending?
This bill is restricting the wrong people. Licensed brokers already disclose YSP, the bill should require everyone, meaning all lending institutions to disclose YSP, banks, correspondent lenders, savings and loans, etc… In doing so the borrower would have an accurate estimate of the total cost of a loan and be able to make an educated and informative decision.
To digress, I am sure the goal of Congress is to stop predatory lending, to protect the consumer from being taken advantage of, an honorable goal that I support in full. YSP is made when the borrower is “sold” or agrees to a higher rate to reduce closing costs, otherwise known as a no cost loan. YSP essentially means the borrower agrees to a higher interest rate. By restricting brokers from YSP but not banks, you have not addressed the real problem. Since banks do not have to disclose, the client doesn’t know his/her total cost of the loan (APR and the TIL only scratch the surface and do not produce a significant counter argument because if you ask 10 people on the street what “APR is?” eight will tell you it is something that it is not, because the consumer doesn’t understand the difference between rate and APR) and can still be sold into a product that they could have gotten at a substantial discount had the bank been required to disclose the YSP it is making.
Now let’s put 100 kids straight out of high school in a call center that has a CFL license and a correspondent tradeline. With this new bill they can still make YSP without disclosing to the borrower, and with no training in ethics or real estate, I think it would be safe to assume, just like in the dictionary, “I” would come before “You,” and this new bill just encouraged predatory lending by forcing broker’s out of the “no cost loan” market so these people have no true competitors other than themselves –with this formula you are asking the consumer to take a pleasant swim off Seal Island during shark season.
I am a licensed broker, with no disciplinary action against me, my associates are also licensed with no disciplinary action, we disclose everything according to current law. We worked to get licensed so we could better serve our clients. This bill will force people like myself out of this industry and encourage more CFL licenses and more correspondent lenders essentially trading ethical licensed real estate agents for unlicensed loan officers, that I am sure have never even heard the word fiduciary.
If you support this bill you have directly attacked my livelihood and the livelihood of my colleagues while encouraging an unstable market and contributing to our potential recession. If you support this bill in my profession opinion you will hurt the American economy, and the consumer will be worse off.
If you support this bill, you have lost my vote.

Sincerely,

Peter G. GladkinAlaska Financial GroupBroker/Owner(760) 730-5040peter@akfin.com

Sent by my business partner, as you should as well.....

Tarhn

just a Rant on Veterens Day and our collapsing markets

First, hats off to the men that fight for this country, there are too many people who have forgotten what national pride, honor and integrity are all about and I want those in our military to know that I thank them for their sacrifices.......... But as I mentioned, the day has passed and the banks have opened for business as usual with all the fanfare of a train wreck.. Once again we are greeted with the ominous financial news that just another bank or investment house has either written off loss, or have downgraded their stock holding (I cant imagine how many hedge funds have collapsed....), consumer confidence is at an all time low, and our inflation prognosis is shakey at best. The media outlets have created such a hysteria over the housing crisis, that you would almost forget that there is a campaign for the presidency going on. Or maybe thats the point. With Hillary stinking up the airwaves and single handedly trying to sink her own election, the media (which is unabashedly right wing liberal), has gone into damage control mode. Granted there is a big issue in the housing market, namely that banks speculated too much on returns and now are biting the bullet. Unfortunately in America(the socialist) nationally we are bearing the brunt of these bad loans(if only through the media's constant bombardment of our senses). The reality, if you dont listen to the doomsday prophesizers, money is exceedingly cheap right now. If you are in a position to be able to leverage any type of equity, the ability to borrower at low rates is unmatched in our history. Opportunities exist...sensationalism sells, whether it is good or bad!!!! America pull your head out of the sand, think for yourself, create for yourself and succeed for yourself. Be accountable in your life and decisions..."Caveat emptor" Let the Buyer Beware........ Do your homework, educate yourself, and more importantly take responsiblity for your own actions!!!

AN END TO YSP???!!! ACT NOW!!!

CALLING ALL BROKERS AND LOAN OFFICERS TO STAND UP FOR YOUR OCCUPATIONS!!!!!


This was sent to me today...

We need to get the word out, and in order to do this we must work together on protecting our interests as an industry!!!
I am writing today as a concerned small business owner involved in the mortgage industry concerning H.R. 3915, the "Mortgage Reform and Anti-Predatory Lending Act of 2007” which passed the House Financial Services Committee (“HFSC”) on Tuesday, November 6, 2007. I am very concerned about this bill as introduced and amended. I fear that, as currently drafted, it will hurt small business and the consumer. Unless certain provisions in the bill regarding my ability to earn a living are clarified, I urge you to share my concerns with your colleagues.The market has crashed. More importantly, borrowers are struggling to find good loans they can afford. If this bill passes I am worried that many options for borrowers will be gone and many customers will be left stranded. As passed by the Committee, H.R. 3915 contains a provision under Title I, Subtitle B, Section 123 that may eliminate an originator’s ability to receive direct and indirect compensation. As currently drafted, this provision may eliminate income (the yield spread premium (“YSP”)) and force many small business mortgage brokers to close their doors. Consumers need zero-point or no cost loans and investors need options that banks and large lending institutions just do not provide. For these borrowers to find what they need and offer options other than large banks, smaller brokers and correspondant lenders need to be able to earn indirect compensation as part of the rate or financed into the mortgage amount. I urge you and your colleagues to support an amendment making this change under Title I, Subtitle B, Section 123(b)(3). In addition, I do not support Title III of this bill, which addresses high-cost mortgages. We believe the practical effect of Title III is to create a de facto federal usury statute. The combination of loan cost limitations together with prohibited practices will stop lending in this in all of the non bank market segment. Let the borrower shop, compare and decide what is best for them, not create a federal government limitation which would limit access to deserving borrowers based solely on price.Please do not support H.R. 3915 unless:(1) Title I is amended to preserve both the consumer’s choice to finance fees and costs, and the creditor and investor’s ability to directly compensate mortgage originators for such fees or costs; and(2) Title III is stricken or significantly altered so that, in effect, there is no de facto usury ceiling and consumers have the ability to access credit.Thank you for your time and consideration of this issue.Sincerely,YOUR NAME HERE
First cc every real estate investor, real estate agent, builder and mortgage person you know...Then go to this link and find out who your representatives are.
http://capwiz.com/namb/home/.

let us work together on defeating this bill...thank you for your time