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Unfolding Nature Shop: Unfolding Nature: Being in the Implicate Order

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InvisibleSenor_Doobie
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Registered: 08/11/99
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Federal Reserve and the Death of Yield Spread Premiums
    #14202705 - 03/29/11 08:39 AM (12 years, 11 months ago)

http://www.npr.org/2011/03/29/134858318/mortgage-brokers-decry-loan-payment-reforms

Quote:


New federal rules go into effect on April 1 that will change the way mortgage brokers across the country can make money. They will no longer be allowed to earn a bigger commission for giving a customer a loan with a higher interest rate.

Consumer groups are applauding the change, but the mortgage industry says the rules are unfair and could drive lots of smaller brokers out of business.




Quote:

f these rules go into effect on April 1, it will mean, "a tremendous amount of layoffs," says Mike Anderson, the chairman of the government affairs committee for the National Association of Mortgage Brokers. "We are hearing from mortgage brokers across the country that say they're going to let all their loan officers go and become one-man shops."

Anderson says the Fed's new rules favor big banks at the expense of small mortgage broker businesses. Big banks will have more flexibility in what they charge customers, while mortgage brokers will be locked into a set profit margin that will tie their hands and make it hard to compete, he says.




Is this an attempt by the FED to drive mortgage brokers out of business, putting big banks at the forefront of the mortgage business?

To me this foreshadows a future in which large banks not only own humongous amounts of property but will also be able to easily gouge interest rates for loans.

What do you guys think?


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"America: Fuck yeah!" -- Alexthegreat

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The greatest sin of mankind is ignorance.

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Offlinezappaisgod
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Registered: 02/11/04
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Re: Federal Reserve and the Death of Yield Spread Premiums [Re: Senor_Doobie]
    #14205192 - 03/29/11 06:30 PM (12 years, 11 months ago)

That the Fed Reserve Bank had nothing to do with it.

Just out of curiosity, who do you think actually put up the money that mortgage brokers brokered?  Big banks.


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InvisibleSenor_Doobie
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Re: Federal Reserve and the Death of Yield Spread Premiums [Re: zappaisgod]
    #14205727 - 03/29/11 08:10 PM (12 years, 11 months ago)

Quote:

zappaisgod said:
That the Fed Reserve Bank had nothing to do with it.




Nothing to do with it? You illiterate or obtuse?


Quote:

The practice has been perfectly legal until now. Brokers get the extra money through what's called a "yield spread premium." And Rheingold is happy to see new rules from the Federal Reserve that will ban brokers from making extra money this way.




Quote:

Just out of curiosity, who do you think actually put up the money that mortgage brokers brokered?  Big banks.




So what?


--------------------
"America: Fuck yeah!" -- Alexthegreat

“Nothing can now be believed which is seen in a newspaper. Truth itself becomes suspicious by being put into that polluted vehicle. The real extent of this state of misinformation is known only to those who are in situations to confront facts within their knowledge with the lies of the day.”  -- Thomas Jefferson

The greatest sin of mankind is ignorance.

The press takes [Trump] literally, but not seriously; his supporters take him seriously, but not literally. --Salena Zeto (9/23/16)

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Offlinezappaisgod
horrid asshole


Registered: 02/11/04
Posts: 81,741
Loc: Fractallife's gym
Last seen: 7 years, 8 months
Re: Federal Reserve and the Death of Yield Spread Premiums [Re: Senor_Doobie]
    #14208679 - 03/30/11 10:21 AM (12 years, 10 months ago)

Quote:

Senor_Doobie said:
Quote:

zappaisgod said:
That the Fed Reserve Bank had nothing to do with it.




Nothing to do with it? You illiterate or obtuse?




No.  Just not a paranoid anti_Federal Reserve nutcase.  Just because it says federal doesn't mean the Federal Reserve did it.  Ever hear of Congress?  Eventually the Fed takes its marching orders from Congress.  Always has.
Quote:




Quote:

The practice has been perfectly legal until now. Brokers get the extra money through what's called a "yield spread premium." And Rheingold is happy to see new rules from the Federal Reserve that will ban brokers from making extra money this way.




Quote:

Just out of curiosity, who do you think actually put up the money that mortgage brokers brokered?  Big banks.




So what?




That was in response to this:
Quote:

To me this foreshadows a future in which large banks not only own humongous amounts of property but will also be able to easily gouge interest rates for loans.




If the market bears gouging the market bears gouging.  As long as they don't collude to set rates then there is nothing wrong with it.  Nor is there anything wrong with the big banks owning property.

I disapprove of this action but it is the culmination of the infantilizing of the American consumer.  This is not a result of Federal Reserve action.  There seems to be a perception that borrowers are infants, especially home buyers, who need to be protected by endlessly regulating lenders.  What that creates is reluctant lenders.  And that is exactly what is driving real estate prices down these days.  Reluctant and vilified lenders.  There is no such thing as predatory lending, just predatory borrowing.  The Fed has nothing to do with it.  The pitchfork crowd does.  Almost all of my arguments with Al regarding the Federal Reserve were about just this misappropriation of causality.  It isn't the Fed's doing.  It is Congress, the press and the whiny lying fucks who didn't repay their loans.


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Unfolding Nature Shop: Unfolding Nature: Being in the Implicate Order


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