Under §1026.36 (d)(2)(A), if any loan originator receives compensation directly from a consumer in a consumer credit transaction secured by a dwelling, “no loan originator shall receive compensation, directly or indirectly, from any person other than the consumer in connection with the transaction.” The definition of loan originator in §1026.36 “includes a creditor that engages in loan origination activities if the creditor does not finance the transaction at consummation out of the creditor's own resources, including by drawing on a bona fide warehouse line of credit or out of deposits held by the creditor.”

Does this mean that if my bank originates a secondary market loan with its own funds, it may receive a fee from both the borrower plus either a servicing release premium or YSP from a sponsor or other investor? But if it acts as a broker in which another party funds the mortgage, it cannot receive income from both the borrower and another source?

Very good question. May be a good time to refer to legal counsel for help on this one. I'm in the same boat with you along
with others I'm sure. good luck.

Profits from the sale into the secondary market is not an issue.

Thanks rl. I needed some clarity with this subject. thanks again.