SB57 and Your Business
Thursday, February 18thA last minute Judiciary Civil Subcommittee meeting was convened today at 5:00pm. GAMP President, JD Crowe was able to make it to the state Capitol before the discussion began. If you have been keeping up with the progress of this Bill, this meeting had originally been scheduled for Mon, Feb 22 but was scheduled late this afternoon as the House adjourned for a two week break.
Chairman Jacobs opened the meeting requesting a clarification of the new RESPA Rule and the requirement for YSP to be shown as a credit to the borrower. JD was allowed to answer this question and directed the committee to prior testimony quoting the RESPA Rule, HUD's FAQs on the subject and an actual 2010 GFE and HUD-1 from a recent closing.
Representative Powell asked if GAMP would have any objection to specific language being added to the bill that would require YSP to be allowed only if it is credited to the borrower and JD offered no objection. After some discussion, the committee members agreed that this language would be acceptable in the Substitute Bill that the committee will draft.
The remaining topics that the Bill addresses were all discussed in varying degrees of detail and we feel that all are being addressed favorably. We are very pleased with the progress that we are making and ask all GAMP members to continue to refrain from calling any legislators regarding SB 57. We believe that we are heading in the right direction and based on today's discussions, are optimistic that the Substitute Bill will not only be something that GAMP can live with, but will actually support.
The Subcommittee will draft the substitute language over the next two weeks while the house is not in session. GAMP will have the opportunity to review the language and testify at the next hearing. Again, we are optimistic that we have made great progress and ask that you stay tuned in case anything changes. The political process is very fluid and the direction can change quickly. We still may need your help, so please stand by and be ready to act if a call to action is issued.
Thank you for your support and your patience.
Monday, February 15th
SB 57 passed the Senate last year and because 2010 is the second year of a 2-year session, the Bill starts the year where it left off last year, in the House Judiciary Committee. The Judiciary Civil Subcommittee has had two hearings from all interested parties, at which 2010 GAMP President J.D. Crowe testified at on behalf of the Association. No more testimony will be heard on the subject. The subcommittee will reconvene on Monday, Feb 22 to discuss the separate issues that the Bill addresses, yield spread premium being one of the topics.
In addition to the testimony GAMP representatives along with members of the legislative committee, have had discussions and meetings with several members of the subcommittee to state the Mortgage Broker's position on ensuring that Brokers are not burdened with a fiduciary duty and to explain yield spread premiums. Currently, the focus of talks centers on RESPA Reform and how the new rule has changed the lending environment and now requires all YSP to be shown as a credit to the borrower. The point has been made that the elimination of YSP only serves to remove consumer choice by eliminating a consumer's option to pay for closing costs by choosing a slightly higher rate.
GAMP representatives are cautiously optimistic that the Mortgage Brokers' point of view is being understood by enough members of the subcommittee and that an amendment to SB 57 will pass. The Amendment is aimed at mirroring the new RESPA Rule and requires YSP to be shown as a credit to the borrower. A decision on the vote won't be known until after the meeting on Monday.
GAMP officials are requesting that no one make any calls and that they stay tuned if the landscape changes. Brokers everywhere are being asked to be ready to contact members of the full judiciary committee, rules committee and full House of Representatives if a call to action is issued by GAMP.