How can I be saying that this is the end of the Mortgage Broker? It's called the Financial Reform, and it is completely changing the mortgage landscape.
The financial reform has introduced a new rule that takes place in April 2011, and this rule takes away the ability for any lender or Mortgage Broker from "incentivizing" or charging more for a particular program or rate. In other words, they are eliminating the YSP and forcing everyone to make the same amount of money or percentage based on the loan amount only.
Not only that, FHA now requires the Lenders be responsible for the actions of the Mortgage Broker. This way the Mortgage Broker. can't originate 50 fraudulent loans and then file for Bankruptcy leaving no one responsible. Instead the Lender (with large financial net worth and liquid money) is held responsible for the loan that the Mortgage Broker originated. So in turn, Lenders now highly restrict and limit the Mortgage Brokers while requiring then to have large sums of net worth and a majority of that liquid, the same way the Lenders are required by FHA. This is not possible for most, or they are simply being pushed out of the business. HENCE, THE END OF THE MORTGAGE BROKER BUSINESS AND MORTGAGE BROKER INDIVIDUAL IS IN SIGHT.
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