Q: What has 2300 pages, takes 150 pages to summarize, has sixteen different section titles, creates 243 new federal administrative rules and mandates 67 studies that require 22 periodic reports?
A: The Dodd-Frank Wall Street Reform and Consumer Protection Act.
One of the sixteen titles in the Dodd-Frank Act, Title XIV to be exact, is called the “Mortgage Reform and Anti-Predatory Lending Act.”
Of interest to us is Subtitle A of Title XIV, which contains the “Residential Mortgage Loan Origination Standards.”
Section 1403 of these Standards contains the “Prohibition on Steering Incentives,” which centers around the new Loan Originator Compensation rules. These rules have been hotly debated and argued over in our industry for the past several months.
Section 1402 of the Standards enacts an addition to the Truth In Lending Act, Section 129B(c)(2)(B). This Section is effective April 1, 2011, and establishes the new way yield spread premium (ysp) will be handled in every residential mortgage loan transaction from now on.
Thankfully, only about 10% of the Dodd-Frank Bill directly concerns MLOs. The way in which ysp is treated is just one of its many new rules.
If you are not aware of the controversy over this topic, you will be once you learn more - it’s
your income and livelihood that are central to the debate. Opinions vary on all sides.
Check out the
following link and view a 5 minute video we've watched on the compensation changes (and a few other topics) and the supporting .pdf documents also at the link. The video is fairly entertaining - not just dry facts.
After considering the information, post a comment to this blog and share your thoughts!