YSP and Prepayment Penalties

Please review these two statements from the Center for Responsible Lending regarding YSP and prepayment penalties...

Yield Spread Premium:  1. "Many lenders pay this premium---essentially a kickback to brokers---only when the loan has a prepayment penalty that helps trap the borrower in the higher-cost loan long enough for the lender to recoup the cost of the payment to the broker."

2. "Because YSP's encourage prepayment penalties, these kickbacks not only make loans more expensive from the beginning, they also effectively penalize borrowers for developing good credit over time."

Obviously, this information makes it difficult for NAR to say Yield Spread Premium "protects and promotes the interest of the client."

NAMB: Code of Ethics

Please review this information regarding the National Association of Mortgage Brokers policy on processing and administration fees: 

NAMB says processing and administration fees are a violation of their Code of Ethics "because they are generally not related to any actual service performed by a broker."

In addition, NAMB says it is not necessary to pay an application fee on your mortgage.

Scott Veerkamp: "Bait and Switch" Advertising

Scott ran the following advertisement in Christian Phone Book: "We
will do our very best to help you get the lowest interest rates
possible at the lowest possible price."

As discussed, Yield Spread Premium and Junk Fees represent the
"extreme opposite" of the statement above. In fact, Predatory Lending
puts the public at risk for serious financial harm. This is the same
public Scott Veerkamp claims to be "Serving."