Brokers whines about lost comissions

Calculated risk puts the brokers in their place...

Now … what yield would the issuer “require” to “hold” that 5%? Well, for accounting, regulatory, or “other” reasons, perhaps that issuer might require a yield higher than 6%. So let’s just assume that the issuer “required” a yield of 10% -- which seems way too high. How would that impact the borrower? Well, we’ll use the complex formula “95% of 6% plus 5% of 10%,” which equals …. gosh, 20 basis points! So … where’d the NAR get 3 percentage points? Well, I THINK they may be using “Gross” estimates of what investors would require to purchase mortgage-backed securities not guaranteed by “the government” (explicitly or implicitly). But wait! That estimate HAD NOTHING TO DO WITH QRM or the risk-retention rule!