Due to improving market conditions CBCMA has increased the YSP schedule on all loans locked today, May 7th and later, restoring original YSPs to pre-Covid levels. Additionally, the FHA Classic High Balance product has been added to our YSP schedule and to our rate sheet.
Questions have been raised as to the appropriate amount of origination and discount points to charge borrowers. Practices vary from lender to lender, raising concerns about how the most vulnerable new home buyers are treated. In order to improve the likelihood of borrower long term success, effective May 18th, CBCMA will allow a maximum origination fee of 1.5%. Additionally, the lender may charge for any CBCMA loan level pricing adjustments (LLPAs). On loans locked May 18th or later, any origination fees (including non-bona-fide discount points) charged to a borrower exceeding 1.5% plus CBCMA LLPAs, will require a refund be made to the borrower for the amount exceeding this threshold. Reasonable lender underwriting, administrative, or program fees are not considered in this calculation, however they are considered in the maximum 3% points and fees test. As before, CBCMA will not purchase high-cost mortgages.
Coupled with our YSP schedule of 150 to 250 bps, Lenders are able to bring in 300-400 bps total revenue on an HFA loan plus standard underwriting fees. CBCMA strives to create a competitive marketplace for HFA/Bond loans, while ensuring consumers are given the best possible financial terms and chances for long term success.
« 20-20: Mortgage Insurance Certificates