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The Federal Reserve issued a final rule today that effectively bans yield spread premiums paid to mortgage brokers, along with loan officers employed by depository institutions.

These loan originators will no longer be able to bump interest rates higher or steer consumers toward certain loan products in exchange for a higher commission.

This was a problem prior to the mortgage crisis, when the highest risk loans (option arms) were often accompanied with the greatest compensation.

“The new rule seeks to ensure that consumers who agree to pay the originator directly do not also pay the originator indirectly through a higher interest rate, thereby paying more in total compensation than they realize,” the Fed said in a statement.

“The final rule also prohibits a loan originator that receives compensation directly from the consumer from also receiving compensation from the lender or another party.”

However, loan originators can continue to receive compensation based on the loan amount via mortgage points.

For example, originators may collect one percent of the loan amount, or $2,000 for a $200,000 loan, in upfront closing costs.

The final rules are effective April 1, 2011.

Consumers to be Notified When Loan Changes Hands

A number of other rules were proposed today, including a provision that consumers be notified when their home loan changes hands.

The move should help facilitate loan modifications, while reducing payment confusion and mortgage-related scams.

Additionally, lenders’ cost disclosures must include a payment summary in the form of a table, which displays the interest rate and corresponding mortgage payment, along with the maximum rate/payment for the first five years and the life of the loan if it’s an adjustable-rate mortgage.

It must also include the fact that consumers may not be able to avoid increased payments by refinancing their current loan(s).

These rules are applicable come January.

Just one bank, Palos Bank and Trust Company, failed this week. The week was the second consecutive slow week for the Federal Deposit Insurance Corporation (FDIC).

The FDIC and First Midwest Bank took over portions of Palos Bank. Palos customers can expect to continue their banking at First Midwest Bank on Saturday. Palos Bank and Trust Company was a five-branch institution based in Palos Heights, Ill. The bank had about $493.4 million in assets at the end of second quarter 2010. The government will take a $72 million hit as a result of the closure.

The failure was the nation’s 110th this year and the 14th in Illinois. The state is second only to Florida (20) in bank failures this calendar year. J

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One in four property listings on the market as of August 1 have experienced at least one price reduction, according to real estate search service Trulia.

That marks the fourth straight month of increases in price reduction levels, thanks to a lack of qualified (or motivated) buyers, record low mortgage rates and all.

The total dollar amount slashed from home prices in America’s 50 largest cities was a staggering $30.1 billion, and the average discount on a price-reduced home was 10 percent off the original list.

“If buyers are unqualified to buy, it doesn’t matter how low interest rates are or how discounted a home is,” said Pete Flint, co-founder and CEO of Trulia, in a release.

“I stated at the beginning of the year that I did not expect to see the housing market stabilize or recover in 2010, and I believe that prediction is being proven true today. We will b

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ING Direct is one again offering a $50 bonus when you open a new Electric Orange Checking Account.

To qualify for the bonus, all you need to do is open an account, activate your Electric Orange Debit MasterCard and use it to make at least 3 signature-based purchases within 45 days of account opening. Once this is completed, your $50 bonus will automatically be deposited into your account on day 50.

ING’s Electric Orange Checking Accountis exactly what is says, a checking account without paper, meaning you don’t get a checkbook. You can pay bills online and even have a paper check mailed, but it is all initiated from your online account. All statements are paper and you get a debit card that you can use at ATM’s or anywhere Mastercard is accepted.

You also can link your current bank accounts to your Electric Checking account that allows you to easily move money in and out of your account. The account also pays some interest on your balances. The i

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If you’re in the market for a new bank and could use a new gadget, a Premier Relationship with HSBC Bank could be an appealing option. The bank is offering with its high-level financial services package a choice of either a Dell Inspiron Mini 10 laptop computer or a Flip UltraHD camcorder. Qualifying for the offer is very simple: You just need to sign up for HSBC’s Premier service and maintain a minimum amount of money in combined personal deposits and investment balances.

• To redeem either 30,000 HSBC Points or the Dell Inspiron computer, you need to maintain a $100,000 balance
• To qualify for 20,000 HSBC Points or the Flip UltraHD camera, you need to have a $50,000 balance

The money used to meet the minimum balance requirement must either be in a new account opened before September 3 or, for existing members, must have been added to the account between July 9 and September 3.

Click here for more information.

About HSBC Premier

A HSBC Premier Relationship with HSBC Bank is a package of financial services provided by the bank. To

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Many people desperately seek mortgage help so that they can catch up on late mortgage payments and pay off their mortgages every month. You can find yourself in a lot of trouble if you’re behind on your first, second, or third mortgage. Here, we’ll give you some clear refinancing tips and other mortgage advice that can help you secure your mortgage payments.

Only Refinance If Absolutely Necessary
First of all, it’s very clear that you should not refinance unless you absolutely have to. While refinancing can extend your mortgage term and even lower monthly payments, you may end up paying more money in the long run. Many refinancing companies exist just to convince people to refinance when it’s inappropriate.

When choosing a lender, be sure to select a company that is licensed in your state. Some very shady lenders out there use deceptive tactics to milk you for everything you are worth.

Remember that it’s wise to get involved in a shorter term mortgage and make a big down payment. A large d

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Should you get a loan to pay off debt? In most cases, no. Just because you can get a loan to pay off your debt, doesn’t mean you should. After all, are you really “paying it off” by using another loan? What you’re doing is delaying the inevitable and/or making the debt a bit less painful to bear (either because you lower the interest rate, payment, or lengthen the time you have to pay it off).

But I know there are circumstances where life happens and backs you into a corner, debt-wise. Whether it’s a job loss, or unexpected medical costs, life can send you in a tail spin and leave you with excessive credit card debt. Most of us have been there.

At this point you can choose to do a couple of different things. First, you need to make sure you stop the bleeding. Find a way to get more income, and/or drastically reduce your expenses to live within the means that you do have. If you do

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