I read in the Realtor Magazine on-line that Chris Murphy democrat of Connecticut wants to ban the YSP, otherwise known as compensation from the lender to the mortgage broker on sub-prime loans.
He claims that this forces borrowers to pay higher rates
A Classic example of socialism. His intention is to save rates for the consumer right? or at least thats what he wantsyou to believe! What this will ultimately do is the following
- Increase fees up front from the borrower (unless he wants to ban that too)
- Decrease the supply for the sub-prime market which will ultimately push rates further up
- Get borrowers to loose the tax deduction they now have on interest. By shifting the compensation that brokers have to the from end meaning that the borrower will have to pay it in form a fee) thats deems it not deductible only when amortized over the life of the loan! most people don't stay in this type of loan for a long period of time therefore getting them to loose is it altogether!
The Mortgage Business is already a very regulated business. further regulation at the point of origination will not deem it more responsible, but possibly drive this entire market out of business therefore decreasing homeownership in the USA
Just another thought
Joel Silberstein
link to article
http://www.realtor.org/RMODaily.nsf/pages/News2007101805?OpenDocument
There are times like this i wish I didn't consider myself a social democrat. They are such weenies. Don't get me started.....
Maybe its time to rethink your position Matthew? nahh Just joking! I looked at your blog and I like your advise
I will be referring to it
Thanks or your Comment