American Banker (04/07/08) P. 9; Berry, Kate
New mortgage broker requirements have been adopted by a number of lenders in response to the subprime crisis, with Wells Fargo & Co. and Provident Funding Associates LP both mandating that brokers disclose upfront how much borrowers will pay in fees as well as the yield-spread premium to be paid by the lender. Additionally, Countrywide Financial Corp. lowered its maximum broker compensation to 4 percent of the mortgage amount, down one percentage point. First Houston Mortgage Ltd. President David Zugheri says these requirements will prevent brokers from handling smaller loans to first-time and lower-income home buyers. With regard to compensation disclosures, mortgage brokers are upset about the requirements and insist that mortgage bankers and loan officers also should be forced to make such disclosures. Wholesale Access Mortgage Research and Consulting Inc. reports a decline in broker market share to 40 percent today from 68 percent in 2004.
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