Shelly-Do you have a list of those who voted 'nay'?
No, it appears the
House Committee on Financial Services does not list this information. I even checked gov.com and they do not either, it seems only House Bills, not Committees get posted. If anyone finds otherwise, let me know.
Although there is definitely a need for reform and oversight in the mortgage industry, what Shelly's brief article does not show is what was included in this bill that can
drastically affect the market as a whole in a
negative manner.
First of all they are seeking to legislate the mortgage broker community out of existance by not allowing yield spread premium. This has been brought forth before and never gained any real headway. It is not beneficial to the consumer since it will limit their choices drastically, and even bump people out of ownership altogether since no one would be able to get a mortgage where some of the closing costs are included in the rate. It also reduces a consumers options and available competition.
If you do not understand what YSP is (yield spread premium), brokers and bankers receive wholesale rates from Banks. Going directly to the bank doesn't mean you will get a better rate. For example: Bank ABC is offering a rate of 6% with 0 points on a retail level, but Broker XYZ is getting 5.875 from Bank ABC and is paying a 1% YSP to the Broker. Another example, and they want to eliminate this altogether to banks and brokers, would be lets say a consumer "qualifies" with debt to income ratios, however only can put 10% down, but is short closing costs. You could raise the rate thereby increasing YSP, and give the overage to the Borrower at closing to pay some closing costs. This marked up Bill would eliminate that altogether.
Secondly, Congress is seeking to legislate underwriting guidelines without any leeway whatsoever. We all know Congress can't walk and chew Bazooka at the same time, so why should they be empowered to be tell the industry what is kosher and not kosher when they have no real industry experience.
Thirdly, the section of the bill regarding holding securitizers accountable by holding them liable in purchasing mortgages that did not meet Congresses guidelines the Bill sets forth needs lots of tweaking.
The committee already put out there rebuttal that class action suits will be not be allowed, only individuals suits if they are facing foreclosure. :roll:
If they really think that every Tom, Dick and Harry who at some point may face foreclosure,
if this Bill is enacted, is not going to come forth and try to prove that they were given a mortgage that was not beneficial to them, the Committee is gravely wrong.
The National Association of Mortgage Brokers has never taken issue with legislating for Broker requirements, liquidity and bond requirements, education and continuing. Matter of fact, they have been advocating this for a long time. Many States already have this in place. New York for example has long had bond and liquidity requirements as well as loan officer have to have a full background check prior to employment and be listed with the State as your employee. Convicted felons need not apply.
The Bill seeks to have a national clearinghouse for all mortgage originators with all the above stated along with full background checks and fingerprinting. This is not being argued and should have been done a long time ago.
This bill doesn't address the more major issues like misrepresentation of the Banks that sold these securities in the first place, the rating agencies, and any other financial puppet in this whole Ponzi scheme.
If you think there's chaos in the industry now, if a Bill like this passes in it's current form you will see much more turmoil. There's a reason why 60% of the mortgages written were by mortgage Brokers and Bankers.
(and the banks bought, underwrite and approved these mortgages and sold them on Wall Street, so that speak volumes)
...OH, the inhumanity of it all!
