NEW YORK-Mortgage banks are expecting an industry upheaval due to new legislations by the Federal Reserve that will restrict the way loan officers and residential mortgage brokers are compensated.
The regulations will ban yield-spread premiums which are rewarded to loan officers or brokers for originating high-interest loans. Alternatives such as rewarding brokers or loan officers a fixed fee per loan and charging the borrower higher up-front fees are under consideration to replace the yield-spread premium concept. For the full story, go to Structured Finance.
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