Yesterday, I attended the Mortgage Broker Commission meeting and the Rulemaking meeting for the Washington State Department of Financial Institutions. As a contract loan processor in WA State, I am required to be licensed as a loan officer or mortgage broker. I chose to become licensed as a mortgage broker as that allows me the ability to process for multiple brokers without having to license my location for each broker that I process for. As a licensed broker/originator, the outcomes of the meetings directly affect me and my business as well as my clients and their business.
The commission meeting was chock full of interesting and useful information and I was disappointed that there were only 13 people in attendance. After the meeting, I spoke with Deb Bortner of the DFI and found out that only 16 people RSVP'd. For those that are not aware, three of the four annual commission meetings are held on the west side of the state and the summer meeting is held in Spokane. I hope that at least one meeting of the year will continue to be in Spokane, but if the numbers in attendance don't improve, that may not happen. For the life of me, I can't understand why more originators in the Spokane area did not attend.
By far, the hottest topic of the meeting was the required Disclosure Summary that clearly states the loan information and fees charged. This is the form that clearly discloses the YSP and attempts to define it. The sampleform that DFI currently has states:
"Your broker will receive a "yield spread premium " of up to $_____*.
* "Yield Spread Premium" or "YSP" means a payment to a broker by a lender for originating a mortgage loan with a higher interest rate. The YSP should reduce the points and fees normally charged the borrower for a market rate loan. A YSP is separate from a mortgage broker fee. Ask your broker for a comparative loan without a YSP. "
Needless to say, this statement was extremely opposed by most of those in attendance at the rulemaking meeting and those that sit on the commission board (as they are brokers as well). It seems to benefit bankers and penalize brokers by emphasizing the YSP charge that banks are not obligated to disclose. I made my comments as did others, but with only 13 people other than commissioners, there were not as many people on record opposing it as I would have liked. I hope that those that did not attend are concerned enough to contact the DFI and submit written comments, though I am not sure if they will be accepted.
I strongly encourage all originators in WA State to attend the Mortgage Broker Commission meetings in the future. This will allow our voices to be heard prior to the new rules going into effect. It will also keep you up-to-date on the changes in the industry. If you are not able to attend, you can always visit the DFI's website http://dfi.wa.gov/cs/mortgage_commission.htmand listen to the Podcasts or review the minutes of the meetings.