Potential Class Action Lawsuit: Loan Steering / Yield Spread Premium

Letter from attorney PDF:
http://www.scribd.com/doc/125651087/YSP-Letter-Attorney

I do not qualify for legal action because my loan was initiated in 2004.  However, it is estimated that 60% of all mortgages across the nation contain Yield Spread Premium  (YSP). 

Please take time to review the letter (above) from a law firm in Indiana.  According to the letter, loans initiated within the last 3 years may qualify for legal action... 

You can find Yield Spread Premium on the settlement statement in your mortgage documents.  It will be listed as P.O.C. or paid "outside of closing."  This shows the dollar amount of the kickback your broker received for inflating your interest rate. 

http://www.responsiblelending.org/mortgage-lending/research-analysis/ib-ysp-110507-final.pdf

http://www.responsiblelending.org/mortgage-lending/tools-resources/ib011-YSP_Equity_Theft-0604.pdf

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."

Scott Veerkamp's "Switching" Technique

"Going In and Going Out" is a term I use to describe the mortgage
transaction I had with Scott Veerkamp. This term is synonymous with
Bait and Switch. Please take a moment to review the following
explanation:

The "Going In" phase typically represents a statement from Scott's
website or his affiliation with NAR. As I mentioned earlier, this
statement is often used as "BAIT."

The "Going Out" phase shows the financial result for his client. As
you might expect, this is where the "SWITCH" takes place. Please
review the following "Going In and Going Out" examples... ( *
indicates junk fee )

Group A: 1. "Serving Others First" going in---and a $500 "processing
fee" going out.* 2. "Keeping the interest of my clients above all
else" going in---and a $960 "application fee" going out.* 3.
"Dedicated to providing the finest service possible" going in---and a
$150 "underwriting fee" from the lender going out.* 4. Scott
describes himself as a "Super Servant" going in---and Scott
"blindsides" his client with a $4,799 "Yield Spread Premium" going
out. 5. "Protecting and promoting the interest of his client" going
in---and a $409 "administration fee" from the lender going out.* 6.
Following the "Golden Rule" going in--and $1,920 in "discount points"
going out.* 7. "Someone You Can Trust" (public awareness campaign)
going in---and thirteen examples of "deception" and "financial harm"
going out.

Group B: 8. "Be truthful in all communications with the public" going
in---and Scott collects $6,239 in "secret bonus payments" and YSP
going out. 9. "Fairness and high integrity" going in---and a $35
"electronic filing fee" going out.* 10. "We go the extra mile to help
you achieve your goals" going in---and a $425 "administration fee"
from the lender going out.* 11. "We'll make your home buying or
selling experience a pleasant one" going in---and a $250 "document
preparation" fee going out.* 12. "You can trust our REALTORS to
always put your interest first and foremost" going in---and a $1,440
"Yield Spread Premium" going out. 13. "You need a professional team
that understands the industry and is positioned to stay ahead of the
game" going in---and a $50 "courier fee" going out.* 14. "We will do
our very best to help you get the lowest interest rates possible at
the lowest possible price" going in---and a whopping $10,938 in junk
fees and "kickbacks" going out.

Hopefully, this information will give you a better understanding of
Scott's "switching" technique. He consistently does the opposite of
what he says he is going to do. As you can see, he often receives a
large financial sum for "steering" people into high cost loans.
Unfortunately, these large financial gains are coming at the expense
of the public.

In summary: The examples above total $10,938 in junk fees and
kickbacks, or $5,469 per loan. Scott collected $6,239 in Yield Spread
Premium from the lender. As discussed earlier, the Center for
Responsible Lending says YSP "steals equity from struggling families."
Nonetheless, Scott describes this scenario as: "Keeping the interest
of his clients above all else."

REMAX Realtors: Disclosure of Yield Spread Premium

Regarding disclosure of Yield Spread Premium, would this be a typical
conversation between a REMAX Realtor and a client?

REMAX Realtor: I can get you a loan at 4.5%, or I can get you a loan
at 5%. I will receive a kickback on the 5% loan for increasing your
interest rate. Which loan do you prefer?

Client: Please give me the 5% loan so you can receive a kickback on
my mortgage. In addition, I want to pay thousands of extra dollars
over the life of my loan so you can deposit the kickback in your bank
account.

REMAX Realtor: Thank you for understanding and appreciating the
benefits of YSP.

Client: You are welcome. As you know, there is a high probability
that REMAX will honor you with a "Lifetime Achievement Award" for your
effort in assisting me with Yield Spread Premium.

REMAX Realtor: You are correct. REMAX requires us to follow a strict
Code of Ethics in the representation of our clients. In fact, we are
required to follow the "Golden Rule" at all times. This is the reason
we are presented with "Lifetime Achievement Awards" each year.

Client: Congratulations on your accomplishments. However, I have one
final question: Should I use Countrywide Home Loans or Wells Fargo to
provide the funding for my predatory loan? I noticed these companies
were listed as "Platinum Sponsors" with members of the National
Association of Realtors.

I think you get the picture... In my opinion, I believe it is more
appropriate to use the word "disguised" when referencing YSP. This is
more realistic than using the word "disclosed."

Why would anyone agree to a higher interest rate if they understood
the financial impact it was having on their mortgage? For obvious
reasons, this is why Senator Merkley refers to Yield Spread Premium as
a "secret bonus payment" and a scam.

Please note: The Center for Responsible Lending and the National
Association of Realtors produced a brochure entitled: "How to Avoid
Predatory Lending." The brochure refers to Yield Spread Premium as
Predatory Lending.

As I mentioned earlier, MIBOR says "Realtors are held accountable for
their ethical behavior." Who is holding REMAX and the National
Association of Realtors accountable for deliberately misleading the
public?

REMAX / Fiduciary Responsibility

REMAX claims their agents have a fiduciary responsibility to their
clients. Are inflated rates and REALTOR "kickbacks" in the best
interest of the client?