Yield Spread Premium (YSP)

The yield spread premium is money paid to a mortgage broker when they originate a loan higher than the current Par Rate. This type of “fee” is considered a back end fee by the broker. They aren’t actually paid by you the borrow but are paid by the lender because they sold you a loan at a rate higher than the par rate.

Mortgage brokers are required to report their YSP to the borrow within three days of an application via the good faith estimate and again in the Hud-1 Closing statement at closing.

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