Hirsch v. BankAmerica Corporation
11th Circuit, April 23, 2003
This is another decision relating to the legality of the payment of Yield Spread Premiums (YSPs) by mortgage lenders to mortgage brokers. Applying the 2001 HUD Statement of Policy on YSPs, the Court first determined whether the broker has provided goods or services of the kind typically associated with a mortgage transaction. [A recitation of the services provided appears in a footnote to the court's decision.] Finding that the broker had done so, the court then moved on to the second step, which is determining whether the total compensation paid to the broker is reasonably related to the total value of the goods or services actually provided." The Court found that, indeed, it was reasonable. The 11th circuit therefore affirmed the district court's grant of summary judgment in favor of BankAmerica Corp. and the other defendants after finding that the district court had correctly determined that both elements of HUD's test were met.