Posted by Joe Ewing on 12/20/06 1:20am
Msg #166846

New request from an LO today

Requested tha that I remove the page in the closing instructions that disclosed his rebate. "California Dreaming ... on such a winters day." I refused to comply. Isn't that a RESPA violation?

Reply by Bruce_CA on 12/20/06 1:39am
Msg #166848

Well.... I would really think so! Also, his rates are listed in so many other places (originating points etc)

Just my $.02
Bruce

Reply by Bob_Chicago on 12/20/06 1:44am
Msg #166850

See your point , Joe, but normally I do not make a .......

copy of instructions for bwr unless they are to sign them.
In this case, however, I might make an exception.
If the "rebate" is in the nature of a Yield Spread Premium.
that is usually dislosed on the HUD as a POC.
Let me guess, this is a subprime loan with tons of
points, junk fees , etc to broker, a high adjustable rate
with a pre payment penalty and maybe even a baloon, that
the bwrs did not know about.

Reply by Joe Ewing on 12/20/06 2:36am
Msg #166854

Re: See your point , Joe, but normally I do not make a .......

This was a World Savings "pick a payment" loan for 1.03 million. The LO promised no points and there wasn't any but the rebate was 22k. That should not matter to the borrower but the LO sure wanted to hide it.

Reply by ReneeK_MI on 12/20/06 4:50am
Msg #166857

It definitely should matter to the borrower ...

... since any YSP is directly relative to the interest rate on the Note. If this loan had a YSP of 22k, I can only imagine how many points over par the rate was - but apparently this LO knew he was dealing with a savvy borrower.

Reply by PAW on 12/20/06 11:19am
Msg #166910

Re: It definitely should matter to the borrower ...

Not all YSP's (or 'rebates') are related to the note rate. Some lenders do provide a percentage return if the broker meets or exceeds certain conditions, such as some volume over a period of time. These rebate incentives (broker or partner programs) do not effect the borrowers rates and terms and are not required to be disclosed to the borrower.

Reply by ADS on 12/20/06 10:34am
Msg #166892

If he wants it taken out he should have sent you the docs without it....you are only there to have the client sign. The LO does not want to deal with the client when he sees this page, that is not your responsibility to answer ANY questions, just get the client to sign. The client would end up seeing the rebate somewhere in the docs anyway. The client should have seen this prior to the signing unless the LO avoided telling them. Leave it in, you are not paid or trained to be te LO

Reply by sue_pa on 12/20/06 11:37am
Msg #166912

since when does anyone pay us to determine if loans are RESPA compliant?

Reply by Joe Ewing on 12/20/06 12:47pm
Msg #166926

---since when does anyone pay us to determine if loans are RESPA compliant?---

Never!