This is a letter that came from NCAMP

Dear NCAMP Member:

I hope this explanation will clarify the misinformation reported by the NC press and consequently running rampant throughout the mortgage industry today.

The bill (HB 2188) which was signed by the Governor Mike Easley (D-NC) contained amendments to the: Mortgage Debt Collection and Servicing Act; the High Cost Loan Statute and the Rate Spread Home Loan Statue contained in HB 1817 which became law in August 2007)

This bill does not eliminate YSP to brokers. Nor does any other bill that was taken up by the NC General Assembly this session. (For the record, NCAMP effectively kept all significant efforts to reduce YSP out of these pieces of legislation)

The legislation does eliminate the ability for brokers to earn income on a Rate Spread Home Loan (defined in HB1817) as a percentage. A North Carolina mortgage broker can still earn a flat fee on these loans as well as be paid a flat fee by a lender (very similar to how lenders pay on equity lines). The fees cannot increase based on loan size. If the loan amount changes then this fee cannot change.

In other words, you can still have a fee for your work on the loan on Rate Spread Home Loans, but it cannot be based as a percentage on loan amount. The fee has to be flat and fixed.

This provision ONLY applies to Rate Spread Home Loans. Broker compensation (YSP) is still allowed on loans that are not considered Rate Spread Loans. North Carolina Mortgage

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