A study just released examining the subprime loan crisis blames mortgage brokers for overcharging borrowers with poor credit.
More often than not, brokers placed borrowers with weak credit in loans with significantly higher interest rates than lender-originated mortgages, according to the study released Tuesday by the nonprofit, nonpartisan Center for Responsible Lending.
By tacking on additional percentage points to subprime borrowers' loans, mortgage brokers got rewarded in bonuses from lenders called "yield-spread premiums" that often totaled several thousand dollars and added thousands of dollars in payments to the borrower during the life of the loan, the study found.
The report's findings came as no surprise to Dawn Marie Bates-Buchanan, managing attorney of Gulfcoast Legal Services in Bradenton, many of whose clients fell victim to adjustable-rate mortgages that have been the trademark of the subprime crisis. Read the complete story at bradenton.com