Getting rid of the Yield Spread Premium is a good way for borrowers to see the total compensation the borrower is paying the mortgage broker and that’s good.
The bad part is that it can’t apply to mortgage bankers.
The loan officer for a mortgage bank could be on salary, for example, but the interest rate could still stick it to the borrower. Because the benefit would go to the mortgage bank instead of the loan officer directly, the cost to the borrower wouldn’t show up in the loan officer’s compensation.
That means if you used a mortgage broker, you would be able to easily see the total amount you are paying the mortgage broker but if you used a mortgage banker you wouldn’t be able to see the total cost to you which would allow the bankers to more easily stick it to you, especially after the competition from the mortgage brokers is gone.
Will mortgage brokers get the shaft from government regulation like the appraisers did?
The change would help the too-big-to-fail banks and helping the too-big-to-fail banks seems to be the top priority in Washington.
It could happen.