House bill targeting payments to brokers unenforceable

(This is Part 2 of a two-part series. Read Part 1.)

YSP abuse, as explained in my first column, arises when mortgage brokers steer borrowers into high-rate loans on which the broker collects a rebate from the lender, without the knowledge of the borrower. To eliminate it, I suggested a simple and easily enforceable rule that would help the naive as well as the informed borrower. The rule is that lenders must credit all rebates to borrowers.

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