A yield spread premium (YSP) is the money or rebate paid to a mortgage broker for giving a borrower a higher interest rate on a loan in exchange for lower up front costs, generally paid in
origination fee
An origination fee is a payment associated with the establishment of an account with a bank, broker or other company providing services handling the processing associated with taking out a loan.
An origination fee is typically a set amount for any ...
s,
broker fee
A broker is a person or firm who arranges transactions between a buyer and a seller for a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal. Neither role should be conf ...
s or
discount points
Discount points, also called mortgage points or simply points, are a form of pre-paid interest available in the United States when arranging a mortgage. One point equals one percent of the loan amount. By charging a borrower points, a lender effec ...
. This “may
e used towipe out or offset other loan costs, like Loan Level Pricing Adjustments (instituted by FNMA).”
References
External links
Howell E. Jackson and Jeremy Berry: Kickbacks or Compensation: The Case of Yield Spread Premiums, Harvard Law SchoolYield Spread Premium and HR 3915
— Mortgage News Daily
Mortgage industry of the United States
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