YSP

bthahir · Joined: 05 Sep 2007 Posts: 36 13.22 Dollars($)

Somebody told me that federal has removed the YSP and there will be no prepayment penalty. Can some one please help me with the truth ?

greg1 · Posted: Tue Jan 29, 2008 11:51 am Post subject:

No. But, there is a bill in Congress that has several modifications proposed including these items. Currently it has passed the House of Representatives. Then the Senate has to pass it. Then the President.

Although these 2 items are debated in the bill it does not appear either will be removed but modification of the current laws regarding them is likely.

If you want to read more do a search for "H.R. 1852: Expanding American Homeownership Act of 2007"

larry · Joined: 27 Jun 2007 Posts: 3328 473.40 Dollars($)

Hi Greg,

Welcome to the forum.

Hope you will enjoy participating in the forum and help people with your knowledge and sound suggestion. Hey you can introduce yourself and let others know about you at http://www.mortgagefit.com/introduce-yourself.html

Best of luck.
Larry

ckalvesmaki · Posted: Wed Jan 30, 2008 7:07 am Post subject:

HR 3915 restricts YSP on subprime loans but has no true effect on conforming conventional loans.....it close resembles the new laws in NC and reads something like this...This is not however a final format......

A "Home Loan" includes:

Owner occupied, 1-4 principal residence in North Carolina
1st or 2nd lien, including line of credit
Purchase or refinance transaction
Loan amount less than or equal to the Fannie Mae® (FNMA) conforming loan amount for a single family residence

Home loans are subject to a "rate spread test", in which the APR is measured as follows:
On 1st liens, the APR exceeds by more than 3% the yield on Treasury securities* having comparable maturity periods and the APR meets or exceeds the conventional mortgage rate** plus 1.75%
On 2nd liens, the APR exceeds by more than 5% the yield on Treasury securities* having comparable maturity periods and the APR meets or exceeds the conventional mortgage rate** plus 3.75%

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