Thanks for the clarification. There’s two new senate bills coming before the WA state legislature. One would require brokers and hopefully their loan originators to act as fiduciaries for consumers.

The other bill will require the broker/LO to refund the YSP to the borrwer at closing if it was not disclosed on the GFE.

WAMB, the industry trade association, is opposed to both of these bills.

Ethical Lending Foundation is in favor of both.

Keep an eye out for these!

As for your first comment, I hear you on the legal issue, but I can tell you that there have been a few times in the past 5 years I’ve seen a POC on a HUD that I’m reviewing at closing, I’ll ask the client, they don’t know about it (or may have missed understanding it in their GFE) and we’ll bring it up for review with the lender. It seems to me to be those times where docs are pushing the limit of the closing period where we’ve seen it happen most commonly, or we’ve seen it on the other side of the transaction.

Regarding this: “We also advise them to ask about yield spread premiums (YSP) and if a mortgage broker will notify them of these fees up front or only with a notice of (POC) paid outside closing on the HUD Settlement Statement.”

Mortgage Brokers and their LOs are required to disclose YSPs up front on the Good Faith Estimate and are not allowed to disclose their yield as a POC.

It must show up on the GFE as a dollar amount. If a consumer is ONLY seeing a YSP on the HUD I at closing and that fee was not disclosed on the GFE, their mortgage broker is violating a state and federal law.

Reba says: “I know several good mortgage folks who give discounts on their fee to clients if a YSP is paid on the back end. What the public doesn’t really understand is that agents are required to do this for their client - we offer it as a service but not everyone takes us up on it.”

I am not aware of any state law that directs real estate agents to perform this service as a requirement. Can you provide a source to the state agency law on this?

Thanks.