Major Changes to Mortgage Broker Compensation

Starting April 1st, 2011, the Federal Reserve will attempt to limit the way in which mortgage professionals, and the lenders that employ these compensation techniques, are compensated by eliminating YSP, or yield spread premiums. Loan originators will still have the ability to earn compensation based on a percentage of the loan amount. How this guideline will be put into practice is yet to be determined. See the Wall Street Journal: “Fed Rules Target Mortgage Abuses” on August 17, 2010.

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