Yield Spread Premium

There's a lot of talk in the mortgage business about the so-called "yield spread premium." While those in the loan business contend that it's a necessary fee for doing business in the mortgage loan world, others view it as simply a kickback. A yield spread premium is a lump sum paid by a lender to the mortgage broker for receiving a loan with a higher interest rate.

As a consumer, you may be completely unaware of the yield spread premium until it appears as a line item on your mortgage documents. While the fee is used to help offset the borrower's closing costs, an unscrupulous broker will see the YSP as a reason to steer clients toward a certain lender. This steering concept is illegal.

As with many rules and regulations in the mortgage loan world, the YSP is often misused to the detriment of the borrower. In this case, it is simply a kickback from the lender to the mortgage broker and it's best to steer clear yourself of any loan that gives your broker a YSP. To learn more about staying ahead of predatory lenders, contact the Bank Fraud Victim Center.

Whether you've become a victim of fraudulent lending tactics or simply want to avoid them in the first place, the Bank Fraud Victim Center can help. Just fill out our free preliminary consultation form below, or give us a call at 401-349-4717. You can also email us at [email protected]. A smart borrower is an informed borrower and the Bank Fraud Victim Center wants to give you all the information you need. Contact us today!

Kickbacks or Compensation:

The Case of Yield Spread Premiums by: Howell Jackson

http://www.law.harvard.edu/faculty/hjackson/pdfs/january_draft.pdf

website: http://mortgage-home-loan-bank-fraud.com

 

Preliminary Audit Form

http://mortgage-home-loan-bank-fraud.com/tila_services_app.html

 

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Yield Spread Premium

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