Janice and Albert Johnson purchased a home on August 12,2020. Their closing was scheduled for September 11,2020. Their mortgage application was completed on August 15,2020 abc their interest rate was locked at that time. They received their GFE on August 21,2020. Their GFE had the following estimates and actual costs:

Chapter 1de Clisting the Deal 479 CATEGORY Loan origination fees (loan GFE ESTIMATE originator selected by the ACTUAL CLOSING AMOUNT Johnsons) $545.00 8785.00 Homeowner insurance Copy and delivery fees by $1.200.00 title insurer $1 535.00 $10.00 $15.00 Stamp tax $5.00 $7.00 process. Discuss whether there are any RESPA violations in the Johnsons' closing Mortgage Brokers, YSPs, and the GFE Two groups have been particularly hard dien hit by the GFE reforms. Under the new GFE, lenders must disclose the yield spread premium (YSP). The YSP is the difference between the lowest mortgage rate the borrower qualifies for and the rate the mortgage broker is able to obtain. The better the credit rating of the borrower, the lower the interest rate for that borrower. But the higher the interest rate, the greater the rebate to the mortgage broker. With this rebate incentive on higher interest rate loans, some mortgage brokers were able to steer borrowers into mortgages that carried higher interest rates but, perhaps initially at least, had lower payments and made them seem appealing to those borrowers. Under the new GFE, the YSPs for mortgage brokers must be disclosed, again with the purpose of giving borrowers the chance to shop around for the best loans for their needs. The GFE chart also allows the borrower the opportunity to compare the full costs of all loans in a form that contrasts the costs of lower initial payments with the true cost of the loan over its full term. Original lenders are not required to disclose their YSPs. Homebuilders, Volume Discounts, and GFE The issue of volume discounts continues to be a contentious one in the real estate industry. Are such volume discounts a "kickback" that violates RESPA? (See p. 480 for more discussion.) Some service providers, such as lenders and closing agents, offered volume discounts to builders who referred their homebuyers to particular service providers. In Yeatman v. D.R. Horton, Inc., 577 F.3d 1329 (11th Cir. 2009), the buyers' purchase agreement with D. R. Horton builders gave the Yeatmans the option of receiving a discount on their closing costs on the house, provided they used DHIM as their mortgage lender (with DHIM being an affiliate of D. R. Horton). The court held that giving buyers an option but not requiring them to use the affiliate is not a RESPA violation. GFE and RESPA Penalties While originally Congress provided buyers/ borrowers with a private right of suit for falling short of GFE requirements, that provision was eliminated, and federal courts have held that there is no private cause of action for the violation of the RESPA's GFE. Rather, enforcement is handled by the CFPB. Altman v. PNC Mort- gage, 850 F Supp.2d 1057 (E.D. Cal. 2012). In addition, loan applicants cannot use state tor laws to recover for RESPA/ GFE disclosures because such suits wouldprovider Title services and insurance when u Initial escrow deposit Daily interest charge and homeowner's insurance CONSIDER... 16.3 Janice and Albert Johnson purchased a home on August 12, 202 their closing was scheduled for September 11, 2020. Their mortgage application was completed on August 15, 2020, and their interest rate was locked at that time. Thes received their GFE on August 21, 2020. Their GFE had the following estimates and actual costs: CATEGORY GFE ESTIMATE ACTUAL CLOSING AMOUNT Recording fees $60.00 $75.00 Property transfer taxes $131.50 $132.50 YSP $2, 173.00 $2,073.00 Title company fees $625.00 (selected by the Johnsons) $700.00