PUBLIC SUBMISSION | As of: November 20, 2009 Tracking No. 803ffaf9 Comments Due: May 13, 2008 |
Docket: HUD-2008-0028
FR-5180-P-01
Real Estate Settlement Procedures Act (RESPA): Proposed Rule To Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer Settlement Costs
Comment On: HUD-2008-0028-0001
FR-5180-P-01: Real Estate Settlement Procedures Act (RESPA): Proposed Rule To Simplify and Improve the Process of Obtaining Mortgages and Reduce Consumer Settlement Costs
Document: HUD-2008-0028-0014
Comment Submitted by Dorothy Reik
This does not address the increase in margin on Option Arms which results
from "yield spread premiums" and also refusal by the borrower to agree to a pre-
payment penalty if the broker is gettin a large "ysp." Option Arms, when handled
appropriately, are useful debt instruments, but they have been abused. I
personally have one and my interest rate went to 7% but now it will go down to
4% because I have a 2.05% margin. Abuse of these programs has resulted in
very high margins and inflated interest rates due to 3 point "yield spread
premiums" offered to brokers by lenders. I always advised my clients to buy the
lower margin and they did. They are all fine.