Vote to pass a bill that requires mortgage brokers to disclose yield spread premiums to borrowers.
- Defines "yield spread premium" as a payment made by the lender to the mortgage broker based on the difference between the interest rate assigned by the broker and the market rate the borrower qualifies for [sec. 4 (17)].
- Expands the disclosure requirements for mortgage brokers to include the full transaction costs incurred by the buyer if the broker receives a yield spread premium from the lender, and the exact dollar amount of the estimated yield spread premium [sec. 2 (3) (a)].
- Requires that mortgage brokers immediately refund the borrower the amount of the yield spread premium, or any gain paid between a mortgage broker and a lender, if the amount of compensation is greater than the original good faith estimate [sec. 3 (4) (a)].
- Defines "original good faith estimate" as a reasonable disclosure of the itemized transaction costs provided to the borrower at least 30 days prior to closing on the loan [sec. 3 (c)].
- This is a substitute bill sponsored by the Senate Consumer Protection & Housing Committee.
NOTE: THIS IS A SUBSTITUTE BILL, MEANING THE LANGUAGE OF THE ORIGINAL BILL HAS BEEN REPLACED. THE DEGREE TO WHICH THE SUBSTITUTE BILL TEXT DIFFERS FROM THE PREVIOUS VERSION OF THE TEXT CAN VARY GREATLY.