NAMB Gets YSP Clarification in 'Predatory' Bill

The National Association of Mortgage Brokers has succeeded in getting a clarification on the treatment of yield-spread premiums included in a predatory lending bill that the House is expected to pass on Thursday.Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, and Rep. Spencer Bachus, R-Ala., agreed to insert language in the manager's amendment that allows the financing of the broker's fee, provided that the fee is "fully and clearly disclosed to the consumer early in the application process." The manager's amendment also includes a new "absent" creditor provision, sponsored by Rep. Mel Watt, D-N.C., that would hold securitizers accountable, if the lender or assignee goes out of business, for fixing subprime mortgages that violate the lending standards in the bill. The National Community Reinvestment Coalition board member said holding Wall Street accountable is essential to prevent "irresponsible" lending and investing. Without a strong assignee liability provision, NCRC president John Taylor said, the investment banks will have no incentive to do loan modifications.