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Deedie: (January 11, 2010 4:24pm)

A Declaration of War on BPOs The appraisal industry and residential appraisers in particular are under siege! Month after month you read stories of alternative valuations such as BPOs replacing appraisals. Here is the latest one published in the Appraisal Institute’s Appraiser News Online: “The Federal Reserve has proposed a new rule addressing … Home Equity Lines of Credit. Among other things, the proposed rule contains several changes in appraisal policy, including an elimination of an appraisal requirement and an allowance for the use of appraisal alternatives – such as automated valuation models and broker price opinions” In November, NAR announced an initiative to develop the Realtors Property Resource (RPR), a parcel centric database of more than 147 million property parcels. Out of this effort comes the Realtor Valuation Model (RVM) which NAR hopes will become the “Gold Standard” for establishing a property’s fair market value. HVCC was introduced last year. The New York attorney general decided that appraisers needed to be protected because they couldn’t say “no” when asked to inflate values. So for half their fee, appraisers are now protected from mortgage brokers by AMCs. Why is this happening? Why are lenders pressuring the Fed to allow BPOs for HELOCs? Why does NAR think it can create the “gold standard” for property valuation? Why was HVCC implemented? Why were two conferences held last year on fixing the industry? Why are solution white papers written on “Reengineering the Appraisal Process”? It’s simple. Appraisers are not delivering the valuation services that the financial industry is requesting. The 1004 may be today’s gold standard in valuation, but only to Fannie and Freddie. The rest of the financial industry wants something else. And they don’t care who provides it. At Bradford Technologies, as a member of the appraisal industry for 24 years, we take this threat to the industry very seriously. Today, we are issuing a Declaration of War against BPOs. This is a war that will not be won overnight, but it is a war that can be and must be won. Appraisers are the valuation experts. No one else is! Appraisers can and should be the only “gold standard” in property valuations. Please note the distinction: The appraiser should be the “gold standard”. Not the 1004; not the Realtor’s RVM and definitely not a BPO. We have developed a battle plan for creating an elite fighting force to wage this war. We understand that the stakes are high, and to win, you need allies. We have enlisted and received the help of some of the largest appraisal firms in the nation in this fight. Every fighting force needs weapons to wage war; they need training to fight effectively and the infrastructure and leadership to fight as a cohesive unit. In this effort, we have developed a new class of weapon for the appraiser – Computer-Aided Appraisal software that can analyze markets and assist in producing reliable valuations in record time. We have developed training programs needed to use this new capability effectively and with precision. With our allies, we have developed the key command and control infrastructure needed to produce a cohesive, focused fighting force. In the next issue of the AppraisalBuzz, “Declaring War on BPOs Part II”, we will detail the battle plan and tell you how you can help win the War against BPOs. Jeff Bradford, CEO Bradford Technologies, Inc. Bradford Technologies has been serving the appraisal industry for 24 years with productivity solutions for appraisers. Its flagship product is ClickFORMS – the leader in hassle-free form processing. It has also developed a appraiser community website called AppraisalWorld dedicated to providing services for building trust and reliability in the appraiser profession. Today, Bradford Technologies is helping appraisers wage war against alternative valuation products such as BPOs

Big AL: (January 11, 2010 3:56pm)

HR 4173, the Wall Street Reform and Consumer Protection Act of 2009, is quickly on its way through the legislative process. If passed in its current form, the provision to “sunset” the Home Valuation Code of Conduct will succeed to the delight of loan originators across the country. “The HVCC has been highly controversial. It has removed anyone compensated on loan production from any material involvement in the appraisal fulfillment process on Fannie and Freddie loans. The HVCC has created enormous angst throughout the lending and appraiser community,” HR 4173, if passed, “shall not prohibit lenders, the Federal National Mortgage Corporation or the Federal Home Loan Mortgage Corporation from accepting any appraisal report completed by an appraiser selected, retained or compen-sated in any manner by a mortgage loan originator.” And, “the Home Valuation Code of Conduct, announced by the Federal Housing shall have no effect.

Big AL: (January 11, 2010 3:51pm)

HR 4173, the Wall Street Reform and Consumer Protection Act of 2009, is quickly on its way through the legislative process. If passed in its current form, the provision to “sunset” the Home Valuation Code of Conduct will succeed to the delight of loan originators across the country. “The HVCC has been highly controversial. It has removed anyone compensated on loan production from any material involvement in the appraisal fulfillment process on Fannie and Freddie loans. The HVCC has created enormous angst throughout the lending and appraiser community,” stated Tony Ebeyer, Certi-fied Appraiser and COO of StreetLinks National Appraisal. HR 4173, if passed, “shall not prohibit lenders, the Federal National Mortgage Corporation or the Federal Home Loan Mortgage Corporation from accepting any appraisal report completed by an appraiser selected, retained or compen-sated in any manner by a mortgage loan originator.” And, “the Home Valuation Code of Conduct, announced by the Federal Housing

Tim Kearns: (January 11, 2010 5:53am)

HAMMER: I've read several of your posts and would like to speak with you directly about being a panelist in one of my upcomming events. If you can go to Rate Alert Forums and give me a Private Message with your contact info that would be great. I am "TK".

Tim Kearns: (January 11, 2010 5:49am)

Global Edge: Click the GFE2010 forum link and it will take you to a thread that might be helpful (it's sticky at the top) called "YSP in Line 1 / Confusion Abounds..." It covers this topic with links and doc's from HUD and RESPA to the contrary. The distinction is that YSP is no longer compensation, only Origination. YSP exists to offeset the origination charge (and other settlement costs). Here is the thread link if you need it: https://www.tbwsratealert.com/Forums/default.aspx?g=posts&m=19442&#post19442 Have a nice day.

Texas Ted: (January 11, 2010 3:10am)

Texas Ted here/follower of the MORTGAGE REVOLUTION ON FACEBOOK.............Frank, Brian and Tim(webinar spokes person) are all CORRECT. It's all "semantics". Quit calling what your adding to LINE 1 "YSP". Line 2 does reflect the credit for YSP "BUT" "BUT" "BUT"..........YSP comes from the lender/wholesaler to the borrower as a credit on the final HUD, it's not a SUBTRACTION from your earnings on line 1. In the "good old days", the YSP was reflected on the HUD as POC to us, the originating company, but now it's a CREDIT to the borrower, it's still there, real money, it just goes to the BORROWER!!!!!!!! If that YSP CREDIT happens to be 1.00% and you want to compensate yourself for that earnings loss, increase your origination fee to 2.000%. Have a GREAT Monday in Mortgage Land.

brian tbws: (January 10, 2010 10:02pm)

at mortgage rev. stoked about the positive vibe tonight

Global Edge Settlement : (January 10, 2010 11:26am)

No matter how you feel about the new Rule, and no matter what you name things, if you expect to collect fees for your work, you better have them in Box 1 or you will not get paid. It doesnt matter what you call them or who pays for them, Box 1 represents ALL compensation to Brokers/Lenders BEFORE any credits or add-on discount points.

No Spin: Just the Facts: (January 09, 2010 12:20pm)

Mr Brilliant Hammer: So you believe 5 years of HUD testing consumers with one objective, keep YSP in consumers face. HUD did everything they could to cover their a.... for the November 12, 1992 YSP rule creation. To this day, they will manipulate FACTS to achieve their propaganda. If you have in FACT done your reading with eyes wide open you will see the footnote on page 4 of The Impact of Mortgage Disclosure Reform: "Bias does show up in comparisons in which broker and lender loans are otherwise completely identical. In which case, borrowers who do not think of the two loans as identical tend to favor the lender loan..." Here it is: http://www.huduser.org/portal/publications/pdf/hb_awm_wjr_kgu_rep_0904.pdf You might represent yourself more professionally if you read entire studies, including 2004 FTC & 2008 FRB. You somehow believe HUD when they produce a 3 page GFE that does not disclose full PITIA & cash to close?

No Spin: Just the Facts: (January 09, 2010 11:34am)

Global Edge: Box 2 has nothing to do with par rates on the wholesale side. This Box was created to continue the bad November 12, 1992 policy of confusing consumers with YSP disclosure (proven by 2004 FTC study & 2008 FRB study as useless anti-consumer HUD/Bank boondoggle). This 18 year rule was intended to put Mortgage Brokerages at a disadvantage to Banks and it did not work. HUD has now elevated its puppeteering by Banks to go even further in its confusing consumers in an attempt to disadvantage Mortgage Brokers. Please, a GFE that does not disclose what the total monthly PITIA or how much money borrower will need at close; this has no benefit to borrower and certainly hurts Mortgage Brokers. A wholesale par rate has no relation to retail par rate. Consumers only need to know what their retail par rate would be. Thus, no anti-consumer YSP disclosure should be required. Rescind the November 12, 1992 HUD RESPA rule that launched this entire YSP anti-consumer pro bank YSPfiasco.

Frank Garay: (January 09, 2010 7:27am)

Global Edge Settlement: per the new respa rules, YSP no longer goes to the broker. It goes directly to the borrower. This is where wholesalers are messing it up. YSP goes in line 2 to the borrower, not in line 1 to the broker.

brian tbws: (January 08, 2010 9:11pm)

circumstance will require a settlement. in the mean time our industry will languish unnecessarily. its not surprising.... unfortunately.

Global Edge Settlement: (January 08, 2010 8:42pm)

Actually I think it will settle out after the first quarter, its just going to be a rocky road until we all start to see some uniform understanding of the RULE. It's going to be okay... especially for those who have done their homework. Call me, I can help.

brian tbws: (January 08, 2010 8:36pm)

the bigger concern is, lenders are scared straight to lend under the new gfe. currently lending as we know it (and its not that strong) is more or less at a stand still. this thing is going to get bigger until everyone gets on the same page. hammer's anger, though zealous, is going to become prevalent in our industry. here we go.

brian tbws: (January 08, 2010 8:36pm)

the bigger concern is, lenders are scared straight to lend under the new gfe. currently lending as we know it (and its not that strong) is more or less at a stand still. this thing is going to get bigger until everyone gets on the same page. hammer's anger, though zealous, is going to become prevalent in our industry. here we go.

drop the hammer: (January 08, 2010 8:32pm)

HAMMER, I am not a loan officer, however by your bad attitude and the time you have on your hands to write all the comments, I assume you are actually out of work and pissed off. just what it looks like to me. it will get better sunshine.

Global Edge Settlement: (January 08, 2010 8:25pm)

Guys - Lets start from the beginning. In a wholesale broker scenario, Box 1 of Section A on Page 2 is meant to disclose all fees paid directly to the broker and the lender in a wholesale transaction. The components are any front end points, any YSP,underwriting, processing, courier, wire, MERS registration and the like as shown as a single number. Box 2 is meant to disclose a par rate,(1.) a credit back to the borrower for a lender or broker paid amount, ie, YSP or no cost or broker paid fees (2) or a true discount point(3). Anyone who thinks otherwise in a broker wholesale scenario has simply misunderstood the RULE. I started out 9 months ago thinking this was the absolute worst thing but have changed my tune as I came to understand what the overall intent of the RULE was. Bottom line, the consumer doesnt care how you ultimately break up your fees, they just want to know what the bottom line is and the RULE does that in all ways, for brokers, settlement &agents & title agents.

CV Broker: (January 08, 2010 3:56pm)

Par pricing - even playing field and no more funny money. We will have to stand on our own merits and offer customer serice - people can shop at Nordstrom or at Walmart but they have a choice for quality and trustworthiness or cheap and faceless.

DD in NH: (January 08, 2010 3:10pm)

I agree with Vista LO and that is how legal explained how we had to fill out box 1...INCLUDING your ysp. And for the comment prior that stated you can just redisclose, you can't just redisclose and increase box 1, box 1 cannot get any higher....just lower!

clulessdad: (January 08, 2010 2:31pm)

Nor Cal MB-yes you can read the agency and FHA guidelines all day long, but each wholesale lender has very specific tightened guideline overlays. They are extremely hard to find and change almost daily. I sure can't keep up with them. Maybe you can.

VistaLO: (January 08, 2010 2:25pm)

Chuck@thebeach: The scenario states the loan is $200,000, the broker is receiving $2,000 in YSP, and there are $500 in other "origination" fees. By deduction, that leaves an origination fee of 1% or $2,000; hence,the $4,500 in "Our Origination charge." YSP's are reflected in both Box 1 and Box 2, if applicable. Otherwise, how do you derive at the $4,500 total?

Nor Cal Mortgage Broker: (January 08, 2010 1:59pm)

To All REALTORS, Appraisers, Mortgage Lenders and even Consumers who have guideline questions: Anyone can read/search ALL of Fannie and Freddie Guidelines 24/7 with no password required. If you are in the mortgage biz, you ought to know this already, but it would be helpful to realtors and appraisers and anyone else who wants to know the right answer regarding something like the 90 day seller seasoning rule. Go to www.efanniemae.com in middle of page, click on big green link that says Brokers and Correspondents, then under Mortgage Product Information, click All Regs Online and there you go: the entire Fannie Seller Servicer manual with all guidelines. For Freddie go to www.freddiemac.com/singlefamily/ and click on AllRegs, just underneath the big letters "Forms and The Guide. They are searchable and if you get your info straight from here, then it will be correct. When an underwriter doesn't know the answer - this is where they go to get it!

Nor Cal Mortgage Broker: (January 08, 2010 1:39pm)

When Fannie/Freddie are the lender for the buyer, they require that the seller be the vested owner for at least 90 days prior to date of contract. PLUS, they will want to see the appraisal make a comment regarding a massive increase in price to make sure it is legit and not a scam flip. Here is an excerpt from Freddie Macs guidelines that explains it: "Sales of properties that have been substantially improved by bona fide and verified renovations since the property was acquired by the property seller in which any increase in sales price over the seller's acquisition costs is representative of the market given the improvements to the home could be legitimate flip transactions. Ensure that the appraisal lists any changes made to the property and includes photographs of the rehabilitation or renovation whenever an increase in sales price/value is justified in whole or part by improvements made to the property." Some lenders added more time, like Provident requires 6 mos B4 they'll lend.

chuck@thebeach: (January 08, 2010 1:32pm)

VistaLO; You are wrong stating that in box1 on page 17 for the wholeseller that the YSP is inc. in box1. It's only in box 2 as $2000 reduction in closing cost w/ a 5% rate. Broker Compensation is $4000

Nor Cal Mortgage Broker: (January 08, 2010 1:30pm)

Fannie/Freddie DO HAVE DEED RESTRICTIONS for 90 days prohibiting resale or refinance that results in a profit or cashout to the Grantee of more than 120% of the previous sale price! So it applies to someone who may have paid cash for an REO. Here is the exact verbiage typed on a Grant Deed from FNMA "Grantee herein shall be prohibited from conveying captioned property to a bonafide purchaser for value for a sales price of greater than $XX for a period of 3 months from the date of this deed. Grantee shall also be prohibited from encumbering subject property with a security interest in the principal amount of greater than $XX for a period of 3 months from the date of this deed. These restrictions shall run with the land and are not personal to Grantee." In my case, my clients paid 219K for the house, so the limit listed on their deed was $260K.

Frank Garay: (January 08, 2010 1:28pm)

Wholesalers are doing it wrong! Here is some great info from the Rate Alert Blog: https://www.tbwsratealert.com/Forums/default.aspx?g=posts&t=7184

clulessdad: (January 08, 2010 1:23pm)

GlobalEdge-Then you should remember that FHA loans had both from the wholesale channel. Because wholesalers sold all their loans, they dcided that they should give some of the SRP back to the LO. To prove it, go to any ratesheet today, pick out a coupon rate at 5.0 and 5.5%. Compare the conv YSP vs the FHA YSP on the same lock days. You will almost always see the FHA YSP larger than conv. WHY? Because they have added some of their SRP back to the lo. It used to be .625 to .75 point, not a trivial amount. If wholesalers went back to this model, it would sure be nice. If the banks dont have to disclose SRP, then neither do we. LOL

Global Edge Settlement : (January 08, 2010 1:10pm)

clulessdad - Actually I've been in the biz since 1985 and remember the days when RESPA had barely been enacted.

clulessdad: (January 08, 2010 1:05pm)

Global Edge-you haven't been in the biz very long. 10 years ago, FHA wholesale had YSP rebate and SRP as separate commissions. Because it was too confusing to some lo's, they decided just to add the two together. Ask one of the old time AE's about it.

clulessdad: (January 08, 2010 1:01pm)

Hammer-Good point about putting the risk of rate increases/decreases on the Borrower. For years I have burdened the risk, but this can really help me out. I am concerned though, that as one wholesaler did this morning, up their fees from $850 per loan to $1200, just to cover the extra cost of the new GFE compliance. We may be pricing ourselves, wholesale, out of business.

Frank Garay: (January 08, 2010 1:00pm)

BT - We will be at the Mortgage Revolution.. www.MortgageRevolution.info

Global Edge Settlement: (January 08, 2010 12:59pm)

clulessdad - No, they are not added together. A Yield Spread is earned by a Broker and a Service Release Premium is earned by a correspondent or direct lender on the Secondary Market. Global Edge Settlement

clulessdad: (January 08, 2010 12:56pm)

Global Edge-That is why FHA deals should go back to a combination of YSP and SRP. That is how it was years ago, but they decided to just add the two together.

Global Edge Settlement : (January 08, 2010 12:39pm)

OOPS- So much for doing a good job proofreading. What I meant was that SRP's ARE NOT subject to RESPA. Bridget - Global Edge Settlement Solutions, LLC

Global Edge Settlement : (January 08, 2010 12:37pm)

What everyone is missing is the difference between and YSP and a SRP. Yield Spreads paid to brokers must appear in both Box 1 and Box 2 of Section A of Page Two of the GFE. SRP's do not appear on the GFE anywhere as SRP's are part of the secondary market and are subject to RESPA> Bridget - Global Edge Settlement Solutions, LLC

Hammer: (January 08, 2010 12:28pm)

Carlos, I always tell them that the rebate is given for taking a higher rate. I also offer them PAR- USE THE TRADEOFF TABLE..........

Carlos Sutter: (January 08, 2010 12:25pm)

Vista LO is right. As wholesalers, we have to include ALL compensation into box 1, including YSP, assuming there is one, or it WILL be deducted when given to borrower as credit. Let's face it, this new GFE actually favors the LO, and not the borrower as was intended, because it makes it look like the borrower is getting a credit when in fact he is paying for it with a higher rate. It will actually make it harder now for me to explain this fact to the borrower; if I'd just shut up about it, the borrower will understand it as a credit. The only good thing is that retail banks won't have a leg up on us anymore.

Hammer: (January 08, 2010 12:23pm)

All I can say about the lenders getting it - well, has anyone ever argued with an underwriter, ROFLMAO? I think you guys know what I mean, I see lots of stuffed suits/skirts who have no idea what the real loan world is about trying to explain this and doing a VERY poor job of it.......

theloanstealer: (January 08, 2010 12:17pm)

@Hammer, you are spot on. I sit here and laugh at all of the ignorant brokers/bankers etc who didn't take the time to educate themselves on the GFE. We've been planning for this change since 2008 and have already taken 4 deals from other's because they can't "sell" the new form. It's really not too complicated and I for one, will not spend my time educating those who are too dumb to figure out a KEY issue in their respective professions. You are spot on in your critique re: loan officers being compared to used-car salesmen. I love this job right now, we're literally taking Candy from children and, judging by the comments on this blog, will be for quite some time.

chuck@thebeach: (January 08, 2010 12:15pm)

This has been funny to say the least about what the industry calls YSP. I believe there is HOPE for us! Love You Hammer! Only we have to understand that our wholesaler/lenders & LO's speak a different langague from RESPA. The wholesaler/lender understands that the most important thing to the LO is access to the rebate/YSP. (old days) That's why we choose(not always) one lender over another, our pocket books. Therefore when the wholesaler/lender says place the YSP in Block 1, they are communciating in our langague back to us (our pockets). To say anything else would confuse most of us. (correct Hammer?) So there lies the confusing in choice of words. Just our way of collecting is different. Let's call it recapture of YSP because we can't let go of the knowledge YSP(our other $$$). Block 2 is only to Disclose the true cost in reducing fees by a Rate increase. That's why we no longer are able to rec. it. It is what it is!

Wayne Gretzky: (January 08, 2010 12:13pm)

Like him or hate him, HAMMER GETS IT. The big issue is so many of you are CLINGING to the way it WAS and the definition of YSP. Start a folder on your desktop. Call it YSP. Now drag it to your trash icon. IT'S GONE. It's like hammer sayd -- PRICELINE. Name your price. That's it. The YSP is like a COUPON. Imagine going to Wal-Mart and buying 100 things. Total price is $2000. That's the ORIGINATION! you are selling it for $2000. Now, if they have manufacturer's mail in rebates, OWNER gets the rebate eventually. That's like YSP. OWNER (aka borower) gets they rebate. once you change your mental conception of it all, it's not complicated. But get it right in your software or you screw yourself.

Rob in AZ: (January 08, 2010 12:03pm)

I recommend looking at the rule itself to all. Here is a link http://edocket.access.gpo.gov/cfr_2009/aprqtr/24cfr3500AppC.htm It's pretty specific and pretty plain. If you charge 1000 Orig & 2000 YSP, 300 processing & 250 Underwriting you show 3550 as "Our Origination". YES Wholesale Lender fees are included in this number. Then you show -2000 as a credit (box 2) and 1550 as "Your adjusted origination charge". The first box is for retail lenders only. Hope this helps!

Hammer: (January 08, 2010 12:00pm)

BCinSD - I don't have the energy to educate you. Go back and read the HUD FAQ, but the bottom line is NO - you are incorrect. Changed Circumstances is NOT carte blanche to make sweeping changes.......

BCinSD: (January 08, 2010 11:59am)

For the GFE to be allowed to change, it requires a change in circumstance of the loan. Going from floating to locked is an acceptable changed circumstance. So, once you lock the loan your lender (if you're a broker) will re-disclose as the broker is not allowed to re-disclose. This basically guarantees that there won't be any problems, doesn't it???

Hammer: (January 08, 2010 11:56am)

@Enigma - I know that box 1 cannot change. That is why I name my price up front - like priceline baby! I have agreed to work for 2% let's say. If the "YSP" goes up to 2.4, my borrower has now gotten a fat rebate and .4 towards his other settlement fees. If the "YSP" goes DOWN, I will have prepared my borrower in advance that he might have to accept a higher rate to get the appropriate rebate amount. I will have PREPARED and EDUCATED my borrower, with - ready - THE TRADEOFF TABLE on THE GFE!!!!!!(and alot of explanation). There is a TON of reason to float - and even more of a reason for Rate Alert. I am a "trusted advisor" (I HATE THAT TERM, LOL) to my borrower. And, the best part - I ALWAYS GET THE MONEY I AGREED ON- BORROWER TAKES THE RISK!!!!! (communicate, prepare, educate - this is great!)

Spence: (January 08, 2010 11:55am)

Hi guys : Whatever happened with the 120k signatures after you brought them to Cuomo's office. The last I heard you were planning to make a deal with them and/or send them to Cong Miller's office. What did I miss? What happened with them? I'd say they make a powerful point. Thanks

BT: (January 08, 2010 11:47am)

Frank and Brian...you mentioned that you will be in Atl next week (apparently I've missed the reason...). Where/how might us industry locals catch up with you, and can you bring us some warm air??? Please???

Enigma: (January 08, 2010 11:46am)

Hammer and all. Hammer you said you would "float" and tell the customer when he can get the best lender rebate, but what you may not be thinking about is that once you issue a "bonfide GFE" Box 1 CANNOT change except for a changed circumstance. If you float and the market worsens, your (Borrowers) YSP is less and the borrowers Net settlement costs just went up. If the market improves Box 1 can still not change and your (Borrowers) YSP is increased and their net costs go down. There is now no reason to float or the need for Rate Alerts as you (the LO) will not benefit from the market moves, but could damage your borrower by having their net costs go up if the market moves against them.

findingsolutions: (January 08, 2010 11:43am)

Hammer, thanks for the straigth forward blogging. The new GFE is going to work out just fine. This industry hates change because of how outrageously easy it has been to make money in the last 10 years. We will finally have professinal standards in this industry that will require education and training to be able to be employed. I love it.

Tobby: (January 08, 2010 11:33am)

Frank and Brian obvously failed Money, Banking & Credit in college. There is no actual "buy down" cost to the taxpayer of the rate. The Feds cost of funds are less than the mortgage note rates, and will only be costly to the Fed (taxpayer) if the differential is not enough to cover defaults. The Fed can effectively hold any note to maturity.

Tim Swierczek: (January 08, 2010 11:33am)

VistaLO you are 100% correct in your view of the disclosure of fees on the new GFE and how it relates to YSP vs SRP. It best for brokers to stop thinking of their fees as origination and YSp and just total what you want to charge as origination. The YSP will offset those charges to the borrower and effectively reduce the origination charges to what would have previously just been what we called an origination charge. The bottom line is that if you don't charge it on line one, you will not make it up on line 2, as you used to do.

Atlanta LO: (January 08, 2010 11:17am)

Frank & Brian - Changed my travel plans and will be at Mortgage Revolution! See you there. Also, if you end up needing bail money, call my cell 404-555-1234!

VistaLO: (January 08, 2010 11:02am)

Gentlemen, I believe you are incorrect in stating the YSP is not included in Box 1. The slide you show to support your theory, from HUD's Power Point presenation (P. 16), is for a Retail loan. Of course, Retail does not have YSP. They receive SRP which is treated differently. The next page in HUD's Power Point Presentation, however, shows the same scenario for a Wholesale loan. Please note that the YSP is included in Box 1. Everyone, please be very careful for if you do not disclose the YSP in box 1, you can not correct your error and will be forced to give your YSP to your borrower! At least that is my understanding after viewing about 6 webinars and conducting my own research.

Hammer: (January 08, 2010 10:55am)

@BCinSD - you're right. It doesn't matter what you put where on a GFE, you can always just redisclose it anyway <snicker>...............hahahhaha (I can't keep a straight face on this one)

Big Pimpin: (January 08, 2010 10:52am)

LMFAO! Frank said "Make it Rain". I think you're supposed to have gold chains and hoes dancing when you use that phrase. That's almost as funny as the "tweakers" remark the other day.

BCinSD: (January 08, 2010 10:48am)

I propose it doesn't really matter what you put where on your initial GFE. This is because when you, as a broker, create a GFE, the interest rate is floating. Once you lock the rate, you will have to re-disclose anyway. And post-rate lock re-disclosing is okay under the new rules. Once your loan is locked, it will be at the lender and your processor will work with them to make sure you are disclosing properly. If you don't have a processor/assistant handling your files, you need to get one. You should be out selling; not worrying about what goes where on a GFE!!! DELEGATE, DELEGATE, DELEGATE!!!

Hammer: (January 08, 2010 10:48am)

***RATE ALERT*****Hey, just wanted to let some of you know - the borrower that I disclosed Tuesday under the new GFE that floated just picked up a nice chunk more on HIS rebate since the market is up 26bps right now.........he was excited when I called him and told him that I still make my 2% that we agreed on, but that his rebate would be going up or he would be able to select a better rate...........

Hammer: (January 08, 2010 10:46am)

@"All of the members" - being a prick, I fit in many places. Your political views are noted and will be filed appropriately within the circular file under my desk..............<grin>

Hammer: (January 08, 2010 10:44am)

@clueless, I can't agree more. I also have the sales skills (yup, I don't have to insult my clients LOL) to sell my value over a retail (especially internet division or phonebank) LO at WF, BoA, etc.........

Barney Frank and the Hammer!: (January 08, 2010 10:29am)

Hammer you should go work with the Obama Hussein administration, because being such an obnoxious prick i think you would fit right in. I think Barney Frank and his gerbils would show you the real hammer! Signed by All of the members of TBWS

clulessdad: (January 08, 2010 10:20am)

Jimmy, Point is a little confusing. You have to fill out the old GFE in detail. If you want 1 point upfront and charge the borrower the second point on the YSP he earns from the interest rate chosen, you must put 2 points in the Origination box. Down at the bottom of the lenders fees are boxes that show "Compensation from Lender to Broker" This terminology needs to change, and is should read "Compensation from Lender to Borrower" Plug in 1% in there, then go to the new GFE and hen check the box that gives it as a credit to the borrower. The adjusted origination charge will change appropriately. Hope this helps.

clulessdad: (January 08, 2010 10:12am)

Each of you should go to the BofA, Citi, and Wells retail internet websites and get their daily quotes and compare them to what your wholesaler is giving you. Beat the banks and you will get the business. BTW-I did this a couple of weeks ago and compared them with a rate from Provident and there was like 2.5 pts difference! Come on guys, wake up. Compete with banks at their own game. Let the borrowers shop. In fact give them the rates from the banks! The reason we all say that brokers are necessary to keep the banks honest is upon us. If you are a broker that thinks they deserve 3 pts on a $250K loan, that time may be over. Compete, baby, compete! If your business/persoanl overhead requires 3 pts, you do need to adjust. If you don't the market will do it for you.

Hammer: (January 08, 2010 10:10am)

Jimmy, just put $0 dollars for the credit, click the second box in that Block, and move along. Yes, in theory you are right, but for the rare times it happens, its not a big deal. In Encompass I can click the first box in Block 2, but I wouldn't do it. Especially if it wasn't locked -

Ted: (January 08, 2010 10:03am)

I am so glad I started this at 4:41 this early cold morning in Texas, the comments have been everything from " we are all stupid to "what I said" makes sense. This banter today has really helped. The best brain storming session I've been involved in for a long time. This has been better then yesterday's webinar but, then again, the webinar realy started this dicussion.. A great day to all from......... Texas Ted

Jimmy: (January 08, 2010 10:02am)

I'll rephrase my question. When I fill out the new GFE in Calyx. Block 2 will not allow me to check the first box because "this GFE is being completed by a broker." But if I am giving my clients a par rate, no discount or YSP (i know this is a rare circumstance but does happen) then I don't see why I wouldn't check the first box in block 2? Any insight would be helpful.

The Mortgage Princess: (January 08, 2010 10:01am)

Scarey Mary-the funny purchase timeline is on the 12.22.09 commentary!

Evil Genius: (January 08, 2010 9:58am)

Just wanted to post something so I got a copy of this whole conversation sent to my e-mail. This was a rich and entertaining and informative discussion, including Hammer's insults. Those of you with thin skin, if it doesn't pertain to you, why waste energy with a response? I've been a bit remiss in not educating myself about this GFE2010 as much as possible. And I'm not the webinar type. After 25 years of wholesale, retail, banking and brokering experience, this is easy stuff. Terminology has changed. Regulation has increased and the industry is subtly trying to right itself. Hammer is right, this will help in the long run. Kinda reminds me of that math problem that was so simple its hard. Look at this with a fresh set of eyes. Thats why I didn't try to understand it inside and out until now. Now, its fresh. I get it, first try. Good luck!

SimpleSolution: (January 08, 2010 9:56am)

Brian-Any update on the HVCC?

clulessdad: (January 08, 2010 9:56am)

The new GFE says it correctly-YSP is credited to the borrower. Period-It is not the brokers anymore. Just beat the banks with rate, adjusted fees, and service. Kinda the formula we always have had to live by. The new GFE is secondary.

Hammer Time: (January 08, 2010 9:48am)

Desert Broker must be dehydrahted. OMG before you post anymore go do some homework. Hammer is right end of story folks. Yes WF does have YSP going in box 1. I do not agree with this and think they are making it more confusing. The response I got from WF is well all we can say is, things will change. So for me I will be taking business to another Lender who uses the KISS mindset. Good Luck and..... For the last time, what you want to get paid plus lender commitment/admin go in box 1. YSP goes to the borrower!

Hammer: (January 08, 2010 9:36am)

@Dan- you are getting confused at some of the terminology being thrown around. We call them boxes, but HUD calls them Blocks. Here is the breakdown- Block 1 is your income (along with lender fees). Block 2 is where you cover YSP - or as I like to call it, Lender Rebate. You've got it right. (and no insult, I respect you taking the class!)

brian tbws: (January 08, 2010 9:34am)

not sure if i understand what you said, but you dont get ysp so it does NOT go in line 1. Its not your compensation.

Clulessdad: (January 08, 2010 9:32am)

You still should be selling deals on the rate and ADJUSTED origination fees. The rest is smoke and mirrors. If you are giving the borrower .125% better in rate and the ADJUSTED origination fees are lower than the banks, you win! You can explain the extra charges from the bank any way you want to, but the bottom line is keep an eye on the bank rates and just beat em! The borrower won't care about the extra income, they are only concerned with what they have to pay and what the market will bear. It is not about what you want to make anymore, it is that you need to be competitive with the bank down the block. Give the borrower a better deal and you will be fine.

Dan: (January 08, 2010 9:31am)

I paid the $39 for the GFE seminar yesterday and my take away was exactly opposite of what you just said, for BROKERS. For Brokers, I understood that you do have to put YSP in Box 1 which should really be called COMPENSATION. I'm I really the kid who ought to be sent to the back corner of the classroom for not paying attention?

Jimmy: (January 08, 2010 9:30am)

An earlier post stated that as a broker I would never check the first option in box 2 of the new GFE but would have to choose the 2nd or 3rd option. (This is confirmed by the limitations in my LOS.) But why I wouldn't check the 1st option if I had offered a loan at a par interest rate and the borrower was paying neither a discount or recieving YSP?

Hammer: (January 08, 2010 9:30am)

Frank, I'm just fed up with the negativity. I'm fed up with being grouped in with people who don't take the TIME and EFFORT to get it. I've talked about and explained this to other LO's at length. There is nothing wrong with people not getting it - it is some complicated stuff. This RESPA thing is a real game changer, and I will readily admit that it took me a bit to realize that as well - but I DID realize it, and because I was working on it. I've talked to too many other brokers who haven't even sat in on one of the hundreds (thousands?) of webinars - FREE WEBINARS - and think they can just "wing" this.......then complain about it. Just venting some pent up frustration, even a bit left over from New Years Eve (good time by the way) with idiots making lewd comments and realizing these are my "collegues".......ugh.

Frank Garay: (January 08, 2010 9:29am)

Listen kids, I'm going to get ready for work now and I'll be leaving you unattended for a few minutes, so please behave yourselves.. Okay?

Frank Garay: (January 08, 2010 9:27am)

We love ya Hammer... :)

The REAL Slim Shady - er, Hammer: (January 08, 2010 9:25am)

OUCH! HELP! THE LAMP OIL BURNS!!!

Frank Garay: (January 08, 2010 9:25am)

Hammer - I get it man, and believe me you make me grin with your posts. But go easy on people dude.. you are in a zone today for some reason. You're kinda gruff this morning, something else going on over there? You are a great asset to the blog so can you kind of dial in a little sunshine for us?

The REAL Slim Shady - er, Hammer: (January 08, 2010 9:24am)

LOL at my alter ego. Guess my 'ID' is talking, or maybe it's my 'inner adult'.

Hammer: (January 08, 2010 9:23am)

Hey everyone -- I'm sorry. I have truly acted like a child because i'm a jerk. I am a pompous loan officer who uses brute force to get my way and it works for me but i'm sorry I acted like an a** hole on this site. I have disprespected myself and my industry and if I could get past my bipolar issues, i'd light myself in lamp oil and light a match

Hammer: (January 08, 2010 9:22am)

@desertbroker - you keep making your hole deeper dude, you don't have a clue in the world. Maybe Frank will explain it to you.

Hammer: (January 08, 2010 9:21am)

Frank, I get a kick out of someone who says "...everyone is making this harder than they have to.", and then goes on and explains how they don't understand it in the least by using a scenario that is wrong. I was being light, but I just do a poor job of it in 1000 character chunks ;-) <-----notice my smiley there, showing my wink and smile. It's easy for me to make it harder than I have to since I have put hours into understanding and "mastering" (obviously not there yet till the dust settles!) it.

desertbroker: (January 08, 2010 9:17am)

Hammer - you are wrong. If I only charge 2 and credit 3% YSP I am now in the hole.

tbom: (January 08, 2010 9:16am)

I think the answer is you do NOT have to put YSP in box one, but you will NOT be receiving it as comp in that situation either. I must say being a banker/broker that the comments regarding "bastard crooks" was clearly made by someone who has no idea what is involved in delivering closed loans to secondary or what expense is involved. When you broker a loan, that expense is taken on by your wholesaler.

dave in icy atlanta: (January 08, 2010 9:14am)

@desertbroker -- if you want to make 2 on the loan, charge 2 origination points. YOU'RE DONE! CONGRATULATIONS. YOU DID IT. Now, if the rate you offer your borrower happens to be above par and there is a ysp connected to that, then the ysp rebate goes to your borrower to offset your closing costs. So do NOT enter 4. Enter 2.

Frank Garay: (January 08, 2010 9:14am)

Hammer - Come on man.... lighten up a little.

Frank Garay: (January 08, 2010 9:13am)

desertbroker - the market will decide. If you're charging 4 and the guy down the street is charging 1, you're going to have to compete. At some point the market will even out with what is considered fair. Make sense?

desertbroker: (January 08, 2010 9:12am)

Here's the other cavate to that - smaller loans are now going to fall into section 32 and high cost almost everytime! So lower income borrowers are really going to be hurt

Hammer: (January 08, 2010 9:12am)

@desertbroker - WRONG!!!!!!! You just charge the 2%. You don't charge 4 and give back - you just charge the 2!

desertbroker: (January 08, 2010 9:10am)

I think everyone is making this harder then they have to. The problem I see is what is going to be considered "normal" origination fees? If I want to make 2 points on a loan AND pay borrowers fees of 2% which I do quite often as I work with low income, I am going to be charging my borrowers 4 points in origination. Is that reasonable and acceptable? and who is going to decide this? the lender? HUD?

BrokeBroker: (January 08, 2010 9:04am)

Did my RESPA seminar yesterday. This particular bank will hold the broker to the GFE and if fees are understated by 10%, restitution will be made to the borrower and paid for by the broker. HUD stands for Head Up Derriere.

Hammer: (January 08, 2010 9:01am)

Frank- I agree. Most lenders don't have a grasp on this yet, and Wells is definitely adding to the confusion.

Hammer: (January 08, 2010 9:00am)

@Understanding - you are right, the banks get the benefit of the market improvements if floating, and don't have to pass it on to the customer. Just one more reason I give the borrower on why they should work with me. I show them Rate Alert (right Frank!) and tell them how I will help advise them when the best time to collect their maximum lender rebate (ahem, used to be called YSP) is.................WOOOOOOOOOT! This job is getting easy!

Frank Garay: (January 08, 2010 9:00am)

Hammer - Right... so they're wrong. A broker can't "charge YSP". So they are adding to the confusion by not using the correct language.

Hammer: (January 08, 2010 8:58am)

@In the business for 25+ years - you AREN'T adapting. It is nothing like DPA, and it isn't laundered money at all. You just don't get it fella.

Hammer: (January 08, 2010 8:57am)

@cluelessdad - you are anything but. You are one of the few who get it...........

Hammer: (January 08, 2010 8:56am)

Frank - Wells ISN'T wrong. They just aren't being clear and are using the wrong verbage to explain it to the brokers because as a whole - well, I already told you how I feel. So they are telling brokers to put the YSP that they are "charging" into Block 1.

In the business for 25+ years: (January 08, 2010 8:53am)

YSP - you can put lipstick on a pig, it's still a pig. I agree, it's just laundered money, it's still going to end up in the broker's pocket. It's just like seller funded DPA. As longs as it goes through a middle man, it's okay. It's a joke, but you can either adapt or get out of the business. Personally, I love how many have gotten out of the business. In the end, only the good brokers will remain because if it's no longer an "easy buck" and actually takes some intellgence. The "used car salesman" of the mortgage business will go find the next best thing.

Frank Garay: (January 08, 2010 8:39am)

Aiken2Broker - Per HUD.. Wells would be wrong. Please send it to us at [email protected]. Cluelessdad - BRAVO!

Aiken2Broker: (January 08, 2010 8:37am)

Brian and Frank, I have a document I want to forward to you from Wells that shows that Block 1 is "The total of all fees paid to BOTH the lender & broker, including YSP, but excluding discount points used to buy down the rate"

Hammer Time: (January 08, 2010 8:35am)

Hammer love your post

clulessdad: (January 08, 2010 8:34am)

Pete-You are using the old thinking when it comes to YSP, in that we get it as long as we disclose it. Not anymore. The YSP BELONGS to the borrower and is only in Box 2. It isn't yours anymore. But in order to get paid more for your deal, you need to charge the borrower more in Box 1 to get it. It is not just disclosure anymore, it is a fundamental change to whom the YSP belongs.

clulessdad: (January 08, 2010 8:21am)

LOL-if we can't understand the fundamental change to YSP, how do you think we can get borrowers to understand it? Wanna have some fun? Try explaining this new RESPA rule to a realtor, along with the new TIL laws and HVCC stuff. Try to explain to them that they need to throw out the 17 day perform/appraisal criteria. Tell them we need binding contracts with the settlement providers. Tell them that we need to disclose two home inspectors and let the borrower choose, in writing. Tell them we can't prequal a buyer if they have a property address without sending out a GFE with ALL the costs, including escrow and title. So I need all the costs from them, in writing, before I can prequalify them. Oh what fun! 60 day escrows will be the norm and the borrower will pay a higher rate for the extra time. So much for all that savings! This just gets better and better.

pete: (January 08, 2010 8:18am)

I think that when a broker creates a GFE, they have to disclose YSP on the top line and give a credit on line 2 When the lender, say Citi, redisloses the same loan, they will not list the YSP at all.

Mortgage Rebel: (January 08, 2010 8:14am)

In regards to refinancing a mortgage - I believe most consumers would get a discount on the owners title policy and this can't be calculated at the time of a GFE so unless a loan officer wants to take a chance of possibly exceeding the 10% variance a loan officer must disclose the FULL cost for the title policy. Are my thoughts right on this?

SimpleSolution: (January 08, 2010 8:13am)

Brian-No update yet on the HVCC and where it stands with FHA?

jp: (January 08, 2010 8:11am)

you said that you would give us some new info on hvcc today can you please do that feb15 is coming soon

synergy06: (January 08, 2010 8:09am)

Now I am really confused-Is the YSP in box 1 and shown as a credit in Box 2 or not?

clulessdad: (January 08, 2010 7:59am)

Just remember that the YSP belongs to the borrower, not the broker anymore. If the broker wants it, then you need to charge the borrower for it. Otherwise it goes to the borrower to pay some settlement costs.

Hammer: (January 08, 2010 7:56am)

@Frank - the lender calls I've been on say "put the YSP in box 1" because they MEAN to put your earnings in box 1. We need to adapt to the fact that YSP DOESN'T EXIST anymore. You charge the client, and the lender subsidizes it ;-)........That's right, BoA is actually going to PAY THE BORROWER TO WORK WITH ME.

Chris: (January 08, 2010 7:55am)

Frank-That is excellent information to have. I have attended 18 webinars and have conducted 5 training sessions for our 100 Loan Officers so we need to get the word out as to how to alter the presentation of the IFW. The math calculation will remain the same but the terminolgy needs to be adjusted. Thank you very much.

Hammer: (January 08, 2010 7:54am)

You guys are often confusing the itemized worksheets, or the Encompass/Point itemizations, with the REAL GFE. The GFE has ONE BLOCK for your income. Page 2, Section A, Block 1 - PERIOD. HUD doesn't give a hoot if you call your fee a broker fee, YSP, or the "I'm too sexy" fee - it goes in Block 1 with no explanation necessary. Only the lenders are looking for itemizations, and only because they have to know what the hell you did and how they redisclose it when the time comes.

Frank Garay: (January 08, 2010 7:51am)

Chris - Might not of got what you were saying. Think I do now. If lenders are telling you to put YSP in box one... they are wrong. That's why this whole thing came up. HUD is telling us directly (we were on the call) that YSP does NOT go into line one. But the wholesalers are saying it does! This is the confusion we are talking about.

Frank Garay: (January 08, 2010 7:48am)

Chris - YSP, per HUD, goes straight to the borrower. YSP does not go into line one. Only your compensation does. The confusion is when we want to earn the YSP we say "add it to line one" But that's not technically what you're doing. You're actually just increasing your compensation to make up for the YSP credit. Hammer said it well in one of his previous posts.

clulessdad: (January 08, 2010 7:46am)

At one time, FHA loans had two incentives for the broker. The first is YSP and the second was SRP. They combined the two together to make it easier for the broker. I wonder why all wholesalers don't change the YSP back to a combination of YSP and SRP? They can even cut a check to me when the loan is sold and actually it will be SRP. Same as the banks.

Hammer: (January 08, 2010 7:45am)

@Common Sense - I love being a broker right now though, especially with the new GFE.........(at least once the lenders catch on, ROFL)

Happy Appraiser: (January 08, 2010 7:45am)

Hammer AKA Mr.Brilliant Hammer: Its obviouse im an appraiser by my screen name, so this conversation your having is pretty much meaningless to me, but what does concern me is that the whole concept for tbws is to be a resource of knowledge to help each other out. You possibly do have a wealth of knowledge in your field, but your delivery of it would make Hitler proud. A truely Intellegent and wise person dispenses his wisdom in a manner that is very palatible. A very wise person told me once: No one cares how much you know, until they know how much you care. Please, for your sake dont skip any more of your anger management sessions, we dont want to hear on the news about someone calling himself Hammer going postal somewhere.

Chris: (January 08, 2010 7:43am)

Frank-Common Sense is saying exactly what all lenders are telling us to do as well. Show ysp on the Initial Fees Worksheet to be included in Page 2 Block 1 and then show the same credit in Page 2 Block 2 Box 2.

Hammer: (January 08, 2010 7:43am)

@Common Sense - BINGO! (Wheww, someone besides me gets it!!!!)

Common Sense: (January 08, 2010 7:43am)

I saw the writing on the wall several years ago and went correspondent. The lenders we sell to have been telling us for a couple of years now that they want to get out of the wholesale business because they have very little recourse in cases of early default. They can make US buy back a bad loan. The most they can get out of the brokers is a refund of the YSP. I was encouraging everyone to find a job with a correspondent, but judging by some of today's comments, I think they may be more successful hawking burgers and fries.

Ex full time Realtor in Florida: (January 08, 2010 7:41am)

Colken We have seen that rule enforced here in Florida. Agents have been marketing the properties during that three month period and if a contract comes in the agents have been rewriting the contracts at the 90 day mark. So what good does the rule do?????

The Mortgage Princess: (January 08, 2010 7:40am)

no common sense, we're looking for the parody Frank & Brian did with all the 'circumstances' happening between the 'timeline' placing arrows every direction...it was histerical!

Common Sense: (January 08, 2010 7:35am)

The time clock is in the new Settlement booklet. what have you guys been doing for the last year since they published these new rules?

Clulessdad: (January 08, 2010 7:35am)

In my morning's email, a wholesale lender just raised their admin fee from $850 to $1200 per loan. Reason: Extra costs in managing the compliance for the new GFE. LOL So much for the new GFE saving the borrower about $700 per deal! I spoke with a couple of AE's yesterday and they have no clue how to handle the new GFE. The investors lawyers are completely confused and until they know exactly how to handle the new GFE, wholesalers can't start processing loans. I have to assume that the same is true with the banks.

Frank Garay: (January 08, 2010 7:35am)

Common Sense - Yep. Are you experiencing any wholesalers telling you otherwise? Cause that's what brought this whole thing up...

LouisianaLizzy: (January 08, 2010 7:34am)

Ok, you guys are officially the "shock jocks" of the mortgage world with your "sexy" campaign. I wonder what's next?

GODLIKE: (January 08, 2010 7:34am)

Wells didn't target Blacks, they targeted people who were stupid enough to take a B loan without checking around. They targeted people who were scared of brokers, look where that got them. I hated B loans and worked with my buyers to get their situations cleaned up enough I could get them A loans, but then what do I know, I'm only a Broker and I always put my own interests above the interests of the public. If you don't believe me just read the papers. Brokers simply don't add any value to the product.

Common Sense: (January 08, 2010 7:33am)

I'm afraid ya'll are still missing the point. No the YSP does not go in Box 1. It goes in Box 2, the second option as a credit to the borrower. Now at the this point you just gave your profit to the borrower, so in box one you will charge the borrower a confiscatory fee which they won't mind because you gave them a big credit in box 2. Technically, it's NOT the YSP, but it sure looks like it. If you don't understand this by now, maybe you should consider getting your appraiser's license. Ha ha!

The Mortgage Princess: (January 08, 2010 7:29am)

Would love to have that time clock scary mary is talking about! Please let us know if available! thanks!

The Mortgage Princess: (January 08, 2010 7:25am)

common sense- thank you! stated with grace instead of someone who may need anger management class! :)

Nuke 'em 'til they Glow: (January 08, 2010 7:24am)

Hmmmm.. at http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm you read the instructions for Page 2 and it says for block _2_ " For a mortgage broker, the credit or charge for the specific interest rate chosen is the net payment to the mortgage broker from the lender (i.e., the sum of all payments to the mortgage broker from the lender, including payments based on the loan amount, a flat rate, or any other computation, and in a table funded transaction, the loan amount less the price paid for the loan by the lender). When the net payment to the mortgage broker from the lender is positive, there is a credit to the borrower and it is entered as a negative amount in Block 2 of the GFE." Hmmmmmm Oh what fun this is :-) Lets all Bow to the Great Hussein Obama our Great Leader of Change. Pffffst ack.. ack!

Tim Kearns: (January 08, 2010 7:22am)

Thanks to everyone who attended the webinar. The presentation was not opinion-based. It was based of HUD’s own examples and countless hours dealing with them on various aspects of GFE 2010, not just line 1. We actually had a HUD rep sit in on a webinar with the same mathematical representation and they commended us. I personally contacted HUD again yesterday to find out where the confusion seems to be and they were helpful but remain insistent that YSP is NOT a line 1 Item. I will post some PDF’s from HUD and RESPA in the Rate Alert Forums a little later today, but all this said…we will keep all attendees and members posted on any findings. Have a nice day.

Scary Mary: (January 08, 2010 7:18am)

Hey there - do you have that funny parody of the time clock that HUD puts out for the client? You used it a few weeks ago on one of your video blogs - please let me know where I can obtain this. BTW - I worked at Wells for many years and agree with Frank

Common Sense: (January 08, 2010 7:17am)

Camq, Wells (and everyone else) has also been threatened with lawsuits by ACORN and other groups for not making enough loans in the same "targeted" areas. See Community Reinvestment ACT. They then figure out a way to make the loans in these areas and low and behold, they are accused of "targeting" these areas because the people in these areas are impoverished for a reason. They don't have the same sense of personal responsibility as most of us and don't feel obligated to pay their bills. The free market works, but this is not the free market.

bada bing!: (January 08, 2010 7:14am)

COMMON SENSE! - Stop posting more about this and simply go read Common Sense's post. He hit the nail on the head. Read it. Don't get it? Read it again. Still don't get it? Ask Hammer to break it down.

Chris: (January 08, 2010 7:13am)

Hammer-thanks for the link. But your condescending tone is unwarranted and unprofessional to say the least. I cannot imagine what it would be like to work with you.

Nuke 'em 'til they Glow: (January 08, 2010 7:13am)

Oh what else is New Hussein Obama is taking this country to Ruin. Love to be a banker I bet if you get comped through a decent correspondent channel you are probably killing the rates that brokers are getting. I know I got sick of getting spanked by all of the wholesalers and when I went banker I went.....Awesome! I normally get 1/2% or more better YSP...er SRP than all of the wholesale lenders and I validate this weekly since I'm still getting their Rate sheets.

Frank Garay: (January 08, 2010 7:12am)

Hammer - Thank you. That is much more helpful. So, in other words, you don't put it in line 1 box 2, which is exactly what we say. And BTW I agree with you 100%, I like it a lot. We did the bit today because apparently there are a bunch of wholesalers out there that DON'T understand it correctly and are screwing up deals over it, which in turn is confusing originators who thought they understood it (which they actually did) but now are second guessing themselves. That's the point of the bit in the show. Thanks for the feedback.

Chris: (January 08, 2010 7:11am)

Common Sense-BINGO! Winner!!!

Hammer: (January 08, 2010 7:10am)

@Chris - your statement shows what you don't yet know, and that is what I based my comment off of. I don't have time, nor do I consider it my responsibility to train and teach everybody. Maybe I'll have a webinar, and everyone can pay me $39, and THEN I'll teach everyone. As far as that link - has ANYONE bothered to go to www.HUD.gov/respa?!!!! It's right there!!!! IMPACT STUDY. I gotta run for a bit - I still have business to do :). I'll check in later for the entertainment. Oh, and Frank, I'm a TBWS member and a Rate Alert member, I respect your stuff, but not always your audience.

Common Sense: (January 08, 2010 7:10am)

Hammer, You hit the nail on the head! Okay goofballs, let a banker explain how you must fill in the GFE and why. You are not allowed to receive YSP, so HUD dictates that any YSP must be paid to the Borrower. Now, if you want to make a profit AND offer a competitive rate, you will charge the borrower a vastly inflated origination fee which happens to coincide with the amount of the YSP which you can no longer recieve. So in the long run, you are recieving your YSP, but you have to launder it first. It's the silliest thing I've ever heard of, but that's HUD for you.

Camq: (January 08, 2010 7:09am)

If u guys open your eyes and get all the facts, you'll find that Wells has been 'successfully' in the past for predatory lending, and will continue to do so if the don't change their practices. I would recommend u guys, since u 'got all the facts', get a job with Wells and find out the real truth. Frank states he worked for Wells and never heard of such practices...really???

Old School Mortgage Banker: (January 08, 2010 7:07am)

I hope you guys are right about this YSP thing in box 1. EVERYONE I'm talking to here says it does. You guys stand your ground and keep doing it your way and hopefully the landmark lawsuit that settles this will not be "First Priority v. US Dept HUD" Let's face it, if you get sued over this and win, you'll still lose in terms of $ and cred. I think the Government intended for this rule to uneven the playing field against brokers. After 30 years of this business you'd think I would have gotten use to crap like this. It happens every decade or so.

Hammer: (January 08, 2010 7:07am)

@Brian - the only reason it is bringing lending to a halt is because most people (lenders included) just don't understand it yet. Don't worry, it will pass, and this is actually a GREAT change!!!!

Chris: (January 08, 2010 7:06am)

Mr. Hammer---would love to read the impact study. Need the link if you can provide it. On the other hand to say I just don't get it is an unfair and untrue statement as you have no idea what I know or don't know. We are a mortgage bank so please share any of your vast knowledge, if you can, about what I don't get. Enlighten us all Mr. Hammer. We are all ears.

Mr. brilliant Hammer: (January 08, 2010 7:05am)

Frank, it's not that hard. I can't speak for the lender, and I wasn't on the call. I don't need to pay anyone to teach me this stuff, believe me. If you want to have a private conversation about this, reach out to me. Let me plant this in your mind - YSP is no longer YSP. Call it a Borrower Rebate from our lenders to subsidize the Broker Fee that we will be charging. We don't collect YSP, and we never will again. HUD feels we have abused it (and many have). This HUD plan is great - and will hopefully eliminate the need for the Fed to keep up with the TIL stuff that would have eliminated YSP and given us flat fees. This change was well thought out - READ THE IMPACT STUDY, the damn thing is 571 pages!!!! I can promise you that I have studied this more, understand it better, and have learned to take advantage of it better than ANYONE else I have talked to yet - and everyone I talk to TELLS ME THAT.

brian tbws: (January 08, 2010 7:04am)

Our contestants come in all shapes sizes and ages.

brian tbws: (January 08, 2010 7:04am)

Our contestants come in all shapes sizes and ages.

brian tbws: (January 08, 2010 7:02am)

Hey guys got some emails. Those pics are just a sampling of our sexyfest contestants. We've got a ton more. Keep the nominees coming. By the way, i underestimated how bad this gfe 2010 was going to be. Its bring lending to a halt.

Sexier than thou -: (January 08, 2010 7:01am)

In the Sexyfest Pics I noticed a preponderance of boobs on the girls part, so I guess I need to send in my pick with my man boobs. Apparently I'd have a good chance to win or at least get in the top 10

Pegg02: (January 08, 2010 6:59am)

FnB - Wow, why was I laughing so hard when you guys were dancing in black and white silhouettes!!?? Good stuff!!

Frank Garay: (January 08, 2010 6:58am)

Uh.. well Mr. brilliant Hammer. It doesn't matter how super smart you are when your wholesale lender is doing things the wrong way now does it? We are truly graced to have you in our presence. Thanks so much.

Hammer: (January 08, 2010 6:54am)

@ Chris - wow, you just don't get it. It's not just a new form. It's a whole new differentiation between bankers/retail and brokers. Go to HUD's website, download the Impact study, and go to page 58 where it talks about YSP..............ROFL, you guys really don't get it.

Frank Garay: (January 08, 2010 6:54am)

Chris - Not sure why you felt you needed to tell me that, but okay...

Hammer: (January 08, 2010 6:53am)

It never fails to amaze me how stupid most of you are. No wonder people think of the mortgage industry as only slightly better than car sales - because you are. I'm not going to waste my time telling you how awesome it is to be a broker right now with the new GFE, and how you have to change your thinking to realize it. However I am going to point out that this RESPA change was put into effect in 2008, and that you morons were too stupid to follow any of the last month's worth of webinars, etc.. Please let me take a moment and thank those of you who have made it even easier for me to take loans from you again and again since you are ignorant and stupid. What a bunch of losers, ROFLMAO!

Chris: (January 08, 2010 6:50am)

Frank-----Yes the form is intially confusing but if you do your studying right, it's just another form. NJ Wholesaler has it right on the mark in more ways than one. First-he explained it correctly. Second----everyone is making more of this than needs to be. It's a new form, new method of disclosure and that's it. Get over it. Move on. Be a professional in your career and it will not be a hinderance to your loan originations. The non-pros will fall off the wayside and leave the rest of us to carry the industry where it needs to go. The consumers may or may not be able to understand the form but the professional Loan Originator will make them feel comfortable and provide as good an experience as can be had given today's climate.

Pointguy: (January 08, 2010 6:43am)

If you are a Point user, all YSP flows to the brwr in box 2 as a credit so the box 1 has to include all intended broker comp plus the YSP as the YSP will be credited back. So in Point if you want to earn $2000 and the YSP is $2,000 box 1 must be $4,000 (plus lender fees) as $2,000 will be credited to the brwr resulting in net broker comp of $2,000.

Chris M.: (January 08, 2010 6:38am)

I love it when Brian says "I DID IT!!!" That's awesome!!

Frank Garay: (January 08, 2010 6:36am)

NJ Wholesaler - That doesn't make sense since YSP must be credited back to the borrower. Hence, the broker doesn't earn it as compensation. This is also what the HUD office told the guys at Rate Alert. We all need to call our local HUD office and see what they say. Please report it back to us and we will get it to the Rate Alert team. I don't think the HOC's even know how to use this form!

Anonymous: (January 08, 2010 6:34am)

Bankers beware! Brokers will be able to show them receiving a credit. Bankers cannot. yet, often, banks have HIGHER rates than brokers. Almost 100% of the time, I can offer a client a lower rate brokering it to the same bank they sought a retail loan from -- and show them a discount. So how much do BANKS have built into the rate and keep it secret from consumers to make the big bad brokers seem like the bad guys.

Anonymous: (January 08, 2010 6:25am)

LoveBeingabanker, your trainer should get employee of the month. You are about to start learning how much the bank has built into your rate when your clients start selecting a broker because they are giving a credit back to the borrower (ysp)and they have a 5.0% rate at 2 points origination and a 1% credit(net 1 to borrower), and you have a 5.25% rate with 1 origination and no credit...

TahoeLoanGuy: (January 08, 2010 6:17am)

Tahoe Loan Guy: NJ Wholesaler-it's not a rule that FNMAE or Freddie have that the seller be on title 90 days before entering a contract, that is confusing to someone with a cash buyer. The rule is if a buyer is getting a fnmae/freddie/fha loan there is a flipping provision before FINANCING is available to the buyer. FNMAE/Freddie sell properties every day with less time passed. The disclosure is a non issue to your cash buyer Colken.

The Mortgage Princess: (January 08, 2010 6:16am)

NJWholesaler- just so we're clear, if you added the ysp in box 1, then credited back in box 2, 2nd box, the ysp would be credited, reducing the costs (and income!)for the loan, no? Selecting 3rd box makes sense if truly paying points so not credited back. If confusing for us, imagine explaining to customers. We are creating a 'worksheet' to offset the confusion to borrowers.

Love Being a Banker: (January 08, 2010 6:15am)

Box 1 Page 2 is for BROKER Origination and YSP. For Bankers it's only Origination.... Bankers can put that in Discount so Borrower can make it Tax Deductible. CFPs, CPAs and Tax Preparers love me. should have had 5 answers guys.

CW: (January 08, 2010 6:13am)

The letter says all compensation. If you broker out the loan that includes YSP. So line 1 has to include YSP since that is part of your compensation. The webinar yesterday caused more confusion.

NJ Wholesaler: (January 08, 2010 5:34am)

It's an FHA rule that nearly every lender (including FNMA) has adopted, that the seller must be on title for 90 days prior to entering into contract for sale. you are probably just hitting greater enforcement of the rule.

Rod Johnson: (January 08, 2010 5:33am)

entertaining...and, gotta love white boys dancing!

Colken: (January 08, 2010 5:29am)

I am a Realtor who works with a flipper- usually buying bank owned foreclosures with cash. There is a Fannie Mae foreclosure we just offered on. The listing Realtor said that Fannie Mae requires they disclose that there is a 3 month deed restriction on the property. Does anybody have more info about this? I've never encountered this before- usually he finishes the flips in 4-6 weeks & we put it back on the market. Some have been sold/closed on before 3 months. Is this something new, or is it specific to Fannie Mae?

V: (January 08, 2010 5:13am)

ok guys you really need a television show better than some of the late night stuff!!!!

NJ Wholesaler: (January 08, 2010 5:04am)

The mortgagee letter that you highlighted stated "The figure in box 1 represents all compensation to the lender and/or broker for originating the loan." For a broker, that's origination points, app fee, ysp and any other name you are allowed to call compensation for getting the borrower a loan. Wholesaler commitment fee goes here as well. In box 2, a broker is never going to use the first choice. if they are getting ysp, they will select the second choice and list the ysp here. If the borrower is paying true discount points to buy down the rate, you list that in box 3. Seriously, everyone is making this more complicated than it needs to be.

Estimator54: (January 08, 2010 5:00am)

The whole thing amazes me. People who didnt/dont pay their bills and have a low credit score were allowed to buy houses to add to their list of unpaid bills. They required subprime loans because of THEIR history. But somehow it is the fault of the people who took a CHANCE on them. These deadbeats who have victumized the common bill payers and want to be represented as victums. Seems to me the solution is/was pretty simple. Raise the required credit score...and revert back to the ole school of thought..if you dont pay the bills you have we are not going to sell/give you a house to live in for free.

Anonymous: (January 08, 2010 4:46am)

i'm thinking that you have to think of it the way anyone who created the change thinks of it -- very simply like a 2 year old. dumb yourself down. charge your total origination (including the ysp you want to earn) in the origination box. so if you used to charge 1% orig and 1.5% ysp, simply make your orig 2.5% OR enter 1% orig and 1.5% broker fee if you're a broker. Then yes, if you give you client a rate above par, think of it as the LENDER is giving the BUYER a lender credit for the YSP amount. EUREKA! Either this is right or i'm going to jail with you Ted.

Anonymous: (January 08, 2010 4:41am)

I attended the webinar but still confused. I have YSP of 1.00, I am going to build my origination up to 2.00%. I will then credit the YSP of 1.00% on line 2, I still mae the same. Am I thinking right or am I going to jail Ted in Houston Texas

Bobbi chigo: (January 08, 2010 4:35am)

Iam not fnished. Now lwt us talk about FA condos After 2-1 the building has to be approved no more spot checks. The brokers in this business have gotten slammed evey which way but up. and even thought it may not sound like i try to keep my glass 1/2 full it is harder everyday. I keep sayng the strong will survive but how I see it lately is the banks will survive and we are getting thrown to the wolves. an't they come somewhere in the middle. I agree there were many people that should not have been allowed to by home or dondos but we did not set thouh standards and there ere brokers out there that if you gave them an inch they took a yar. I GET IT. I am a honest broker who never never screwed anyone and never charged more that the closing and gave a credit on every loan. What the Hell is going to happen here

Bobbi chicago: (January 08, 2010 4:28am)

Hi Everyone, need to ven this AM. Where do I begin let us start with HVCC which totally sucks. We all know why but what is so heartbreking is that it is putting well qulaified apprasiers out of business and keeping "sub prime" if you will appraisers in business. I am not saying all but many many many. The next is the underwriting, while we all have to live it has become atreacherous road to get loans done. I have clients that have superior credit, job stability, assets and guess what maybe their debt ration is 51% and ofcouse Du 8 goes to 49.9 so that blows Ho9w we try du Plus or Freddie open ccess depending and the hits are frigging ridiculous. 798 score upside property 3.750 hit . What the hell is that all about. Who is making money the banks and the government and we are still getting it shoved up the you know what. Let us talk about Condos in Chgo. We all know why they are a high risk but for heaven sake this city is filled with them .

terrsanc: (January 08, 2010 4:09am)

OK, I feel stupid, did I hear you guys say we cannot earn YSP and that is why it does not go in box #1 (origination) on the new GFE?

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