Alec,What a fine piece of journalism. I do not know your background, but to do a little research. You portray every mortgage broker as a sleeze. With the end of yield spread premium, the banks will drive half of their competition out of business and we will see less compettion and higher rates. No cost refinances will be no more. Many brokers, including myself, use YSP to cover the costs of loans. When I sit down with a client, I give them several options, a lowere interest rate with higher costs or less costs and a slightly higher rate. I always point out how long it will take to make theri closing costs back on a loan.

A better solution would have been to disclose in 18 point font that the broker was getting a certain amount in YSP. I always disclosed this to my clients. Unfortunately, there are a lot of scumbags that put their clients in lousy loans. These brokers are prostitutes and will do anything for a buck. They are no different than many in our political system. From the outside, it is a good idea, but once again the govt complicates matters, making it worse for Joe consumer.
Let me guess, the banking lobby of B of A and Chase were behind this. WWAMU and Countrywide are more responisble than any other entity for the mess we are in.

To understand YSP you have to understand how mortgage industry function in general. Brokers are not the only entity that receive YSP, bankers do also receive it when they sell and or pool their loans which normally they share their projected profit or YSP with the originators wither those originators are their loan officers or a brokers the only different between the bankers YSP and the brokers YSP is that the brokers YSP is receive up front and disclose to the clients and the bankers YSP is received after closing and not disclose to the clients. What ever is going on are ridicules the same people created the crises, they solving it now, from regulators to government officials specially the one made millions of creating these toxic products and then accept a government jobs to fix it. The whole thing is exactly like if a company produced a bad baby formula caused many deaths and we leave the company who produce it but we put its owner and officials in the prosecutors sets to prosecute the vender who sell it imagine if this happened in china, I think we should gave the Chinese this fixing job after all they directly or indirectly owns most of our loans.