New FHA rules?

Question

I talked to a mortgage broker this evening who is worried about his job. He says that there will be new licencing rules, I think he said a regular licenced broker will now be able to do FHA loans. Not sure.

Also he says that they are going to create a new rule that prohibates (spell?) them from earning "back end profits" they will only be able to earn money from the origination fees.

He also says that FHA insured loans will now hold the lender more responsible, Ithink he said they will be responsible for and default in the first year. And minimum FICO scores are going up from 620-640.

I am definately not an expert on the matter so take all this with a grain of salt.

Anybody know if any of this stuff is true?

Brian Haskins · Answer

I'm currently reading a few tony robins books. They are all great.

Brian Haskins

Jason S. · Answer

There are a lot of crazy new rules and "crazy talk" of crazy new rules revolving around all types of lending.
                    
                    Have not heard of sharing 1st year default liability that would be a tough sell.  It certainly would favor banks and wipe out independent mortgage "shops".
                    
                    The back end profits you mentioned (most of which is called Yield Spread Premium or YSP) is certainly on the chopping block.
                    
                    It looks as if all the rules, as all over regulation does, favor the big players and originators like Banks and are focused on destroying the independent broker.  This has been the goal of banks for many many years - by eliminating the YSP etc they remove the money they pay to the individual brokers and hence "Lower the cost of origination" <---- that is something you here from Bank Execs all of the time.