So will banks have to disclose SRP?
Posted in RESPA reform By Matt Carter, Thursday, April 3, 2008.Note: This topic was originally submitted as a comment on an Inman News story, HUD rolls out new RESPA reform proposal.
Submitted by Rodney Williams on March 16, 2008 - 5:01pm. So does this mean that Banks will have to disclose their SRP, which is known as a yeild spread to mortgage brokers? This would only be fair and as a Correspondent Lender I would like to know what Banks receive on the back of the loan. My rates are 1/4% lower than Banks offer and they charge 1 point on the front where I usually charge nothing on loans above $100,000.
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Submitted by Matt Carter on April 3, 2008 - 8:26am.
Rodney, it looks like the way HUD proposes to deal with this is a little "If your loan is sold in the future" disclaimer on the final page of the proposed GFE, which reads:
"Lenders can receive additional fees by selling your loan at some future date after settlement. Once you have obtained your loan at settlement, however, your loan terms, adjusted origination charges, and total settlement charges cannot change. After settlement, any fees lenders receive in the future cannot change the loan you received or the charges you paid at settlement."
Submitted by Diane Cipa on April 3, 2008 - 8:57am.
I agree, Matt. There's a very good reason for this method. Mortgage lenders pool mortgages and aren't normally pricing each individual loan as it closes. The lending pipeline is more like a big spicket. Closed loans flow virtually into a pool from which secondary market personnel tag and select loans that fit criteria for packages they are delivering for securitization.
HUD made an effort to focus the eyes of the consumer on total costs and how what they pay out of pocket impacts their rate. This total cost data disclosed on the front page of the GFE provides a level comparison between all types of loan originators, whether broker or lender.