The Department of Housing and Urban Development would require upfront
disclosure of mortgage brokers' compensation in a proposed revision of
the good-faith estimate the department is expected to send to the
Office of Management and Budget any day now.

"Lender payments to mortgage brokers tied to the interest rate of the
loan (yield-spread premiums) would be disclosed on the GFE because of
the borrower's need to understand the trade-off between the upfront
settlement costs and the interest rate," HUD says in an outline of the
proposal that it used to brief key members of Congress Oct. 30.

The outline obtained by MortgageWire says HUD's testing of the GFE
shows that consumers could identify the cheapest loan 90% of the time
whether the offer was made by a lender or a mortgage broker.

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