30 Responses to “Yield spread premium (YSP), good for home buyers”

1. Olen Says:
   May 8th, 2009 at 2:58 pm

   First of all, whether they are disclosed or not, BANKERS have yield spread premiums also…the difference between the cost of the money to them and the interest rate they charge.

   Second, we are a capitalist country. Lenders/brokers are allowed to make a living. You want to lower your mortgage payment? Put down a larger down payment to reduce the principal amount; pay closing cost (discount) points upfront in order to reduce the YSP and interest rate; Pay more than your minimum mortgage payment to pay it off sooner; OR save up your money, get ripped off on non-tax-deductable rent for decades and pay cash for your home.

   Third: While you are griping about the 2-3 points that a broker lives on, for some fairly difficult work involved in placing all but the “best borrowers”; why not consider the 6-7% that real estate broker charge to sell a home, for much easier work? If you say that YSP raises the mortgage amount and the real estate commission does not…because it is paid by the home seller as an expense…GET REAL! The majority of sellers do not accept the realty commission as an expense to be paid out-of-pocket from the proceeds. They add it to their sales price. In effect, the buyer is paying the commission and it increases their purchase price. With little money down, the mortgage is increased by much more than it is effected by a Yield Spread Premium or even discount points that are financed.

2. Brent Mendelson Says:
   April 29th, 2009 at 10:35 pm

   Jennifer Ling,

   I just saw your post. Sorry for not reading it earlier. How would you like us to be paid? It’s one of three ways, from you, the bank or a comination. Why is this so hard to understand??? It’s no secret, it’s disclosed many many times as it should be. Sorry you fel ripped off but at least now you know. I guess none of it’s your fault for not understand the process either right?

3. Brent Mendelson Says:
   December 19th, 2008 at 12:27 am

   YSP’D
   Let me ask you, did you shop your lender against other people or just go with him? The reason I say shop the rate is that is the only way to know for sure if you have the best deal on the table. Not everyone must disclose YSP did you know that? Brokers do, direct lenders don’t. So you’ll never know how much they make, you can only shop me versus Wells direct by shopping the rate. Of course you would have been happier with a lower rate we all would. That’s why you shop and compare apples to apples wth two or 3 or 4 good faith estimates. And yes I suppose I would have to agree with you. YSP is the profit and then of course we have expenses and overhead like all companies do. You mention getting a fair and reasonable profit, well therein lies the problem. What is fair and reasonable? I guess it’s like pornography, you’ll know it when you see it. But there is no standard defintion of that for everyone. And you are right shop the rate but how did they get that rate? If someone is .50% better than me on rate but are charging 2 points to get there is it really a better deal? In my opinion no it’s not but again some might argue that it is. To cheer you up, there is more transparency on YSP then ever before and I think that trend will continue. If people at least in MD say they didn’t know then they simply aren’t paying attention. Thanks for writing in.

4. YSP'd!!! Says:
   December 11th, 2008 at 7:40 pm

   Brent – I did get charged fees, points, and YSP — and sum total they added up to 2% of my loan value … to answer Loan Officer above, had the total been 1.5% (vice 2%) then my broker would have made less money and I would have had a better rate which equals lower payments which equals a better deal for me — that’s why it matters. I was happy at 5.5 – I would have been happier at at 5.25 — and happiest at 5.0

   And Brent – correct me if I am wrong, buy YSP does NOT equal broker profit on the loan, it equals revenue that the broker recevied. That revenue minus direct and indirect costs equals profit. And yes, I am a capitalist and believe that everyone should make a fair and reasonable profit.

   Now, what is fair and reasonable? Well, in government contracting where I work, the market place and competition determines fair and reasonable within the confines of the F.A.R. In this case, as Brent himself recommends, shop the rate — but not only the rate, but how that rate is derived, which is points, fees, and YSP. If all brokers were transparent in these areas and upfront with the consumer then competitive pricing would rule. There is a lot more transparency now (minus the banks) into rates and structure, but as a consumer, I am going to continue to push for the most visibility and the best rates …

5. Brent Mendelson Says:
   December 10th, 2008 at 10:41 am

   YSP’D

   Tell me what the Walrus comment means, I would like to know.
   Here’s my opinion again. That’s why I say shop the rate. I don’t think people should worry about what I am getting paid, I really don’t. Can you please tell me another industry where this would occur. YSP is the profit on loans. Now if we are charging broker fees, points and getting YSP then I agree that is a bit much. If you shop the rate then YSP is reduced. Again if they weren’t charging points or a broker fee then the YSP was the only profit method. Lastly, when I price out a loan, I offer a no YSP option with points and one with YSP. I explain the difference and the benefits and help the client decide which is better. Let me know if you have any questions.

6. loan officer Says:
   December 10th, 2008 at 10:16 am

   YSP’d, why does it matter? You were happy with the terms you received. Why do you care what your broker made? Do you expect him to work for free? Receiving a ysp enabled your Broker to give you a O points loan. You could have opted to pay points and lower your rate, and your Broker would have received NO ysp.

7. YSP'd!!! Says:
   December 9th, 2008 at 7:31 pm

   I just closed on my refi loan last night and my broker was professional as was all of the team (appraiser, underwriter, insurance, title) that helped navigate me and my wife through what can be a very stressful and confusing situation. For that, I owe my broker a huge debt of gratitude for a job well done. What I don’t feel that I owed him was a 2% commission on my loan value without having discussed / negotiated that rate up-front. I never saw the YSP amount until the HUD1 on the night of closing and in hindsite, should have stopped the process right there and then.

   Had he said up-front “In addition to our fees (as listed on the GFE), I typically make X% on a loan and on your loan that will be approximately Y$. Part can be paid by you in the form of points and the remainder will be paid by the lender as YSP and you will see that exact amount at closing” then I would not be on this website making this comment because I would have been fully informed (or to quote Pat Cadigan, Incurablely Informed).

   As it was, I will be next time ….

   p.s. The name calling above was completely unwarranted

   p.p.s I laughed when I got to the part of the “dirty secret” guy’s website and he was hawking books for $30 a shot

   p.p.p.s Paul is the Walrus

8. Jennifer Ling Says:
   October 3rd, 2008 at 4:27 pm

   Readers: please take note that all the postive posts in this article are from fellow mortgage brokers. Without YSPs (earned deceptively from borrowers’ hard-earned money) these brokers might not be able to heat their pools at night. If YSPs are such a great thing, then why have these people fought against disclosing this when you are shopping around for a loan? Because it is a dirty secret, because it is ugly and because it will scare any potential borrowers away. Everyone with a negative post here have been borrowers. I have yet to see a borrower cheer with delight as they committed to a higher interest rate so their broker can make an extra KICKBACK. Here is the definition of the yield spread premium:

   The yield spread premium (YSP) is the cash rebate paid to a mortgage broker based on selling an interest rate above the wholesale par rate that the borrower qualifies for.

   So that would indicate to me that your “friend” qualified for a lower interest rate, but you sold her on a higher one. And in my experience, the broker pocketed the YSP (which was disclosed only in the HUD-1 at the day of closing) and her fees without contributing a cent to our closing costs, so…how does that help us? I doubt this is any irregular practice as most borrowers in our situation don’t even know what that term means without looking it up and they didn’t find out about it during the day of closing when they can no longer do anything about it. Why not tell people you are getting a “rebate” for charging them a higher interest rate when they are shopping around if it is so beneficial to them? Maybe because that would scare away potential “marks”.

   Oh, and it is the borrower’s business to know your comission when they are paying for it indirectly. The money might come from the bank, but it originated from the borrowers. The YSP is a result of a borrower committing themselves to a HIGHER INTEREST RATE. I, for one, would have opted for a lower interest rate, had I known my broker raised it for his kickback, but I was never informed of this option. The government believes this is our business. Consumer protection agencies believe this is our business. The only people who don’t believe this is our business are the brokers and gee, I wonder why.

   As this webpage pretends to do, I’m going to offer advice to potential borrowers, I know I can’t compete with the silver tongued brokers, so I speak directly to the borrowers in hopes that they can make an informed decision: ASK ABOUT YSPs EARLY AND BEFORE COMMITTING TO A LOAN BECAUSE THEY AREN’T GOING TO TELL YOU ABOUT IT.

9. BrentMendelson Says:
   September 5th, 2008 at 12:35 pm

   Matt,

   What can I say, awesome post. We have all been ther haven’t we?
   Hopefully we can get these guys to see the light someday. It’s why I wrote this in the first place to counteract snake oil salesmen like Rob Blake and John Shibley.

10. BrentMendelson Says:
    September 5th, 2008 at 12:34 pm

    Cameron,

    If Steve made that deal and shopped around that was the best why wouldn’t that be fair? Isn’t that what we do with credit cards and especially car loans?
    You really need to read the other posts here. I am going to lay it out for you one more time. As a mortgage broker that YSP is disclosed as a range on the GFE when your package goes out. It is also written on the HUD-1 to the penny at settlment. Don’t shop the YSP, shop the rate!! That by the way is the law so it is followed. Every time. Cameron, I would agree if there is YSP and a 2% broker fee it could be excessive. Most of the time there aren’t such fees. Look at Matt’s comments, he nailed it. Again please reread my orginal post 2nd paragraph to see how loan officer are compensated. There are also reasons that they rate or points could be higher and they are all related to the customers income, credit and loan to value. If someone comes to a lender with a 650 credit score needing a loan and only has 10% equity they will pay a higher rate than someone with a 750 score and a 75% equity position. Or pay points to cover. You don’t like that, well to bad, those are the rules and they are very straightforward. I appreciate you taking the time to write in, just do a little homework first and ask questions instead of throwing bombs.

11. BrentMendelson Says:
    September 5th, 2008 at 12:25 pm

    John,

    OK your numbers make some sense. Last time I looked if you borrow money whether from a person or a bank they will charge you interest and make money. Isn’t that the whole reason you loan someone money? If you say no then please come loan me some money for 0% interest. How much over par is determined by your broker and YOU!! As I always say, shop around, tell them you want to pay points instead and par the rate out. Most brokers don’t care how they are paid. Being a smart informed consumer and using someone you actually know can go along way to ensuring the best deal available.
    I have to say though you don’t get YSP 100% from reading your comments. Only speaking for myself but I always explain options to my clients. Please reread the second paragraph of my original post as to how loan officers are compensated. Unless you were here listening to me, I don’t know how you would know what I tell my clients. Suffice it to say you are wrong about what I tell them. I only speak for myself of course, there are plenty of shady people in the business and it sounds like you ran into them and didn’t get the best deal possible. Sorry to hear that but if you had taken my advice that probably wouldn’t have happened. Again reading you comments, you accuse me of not asking the proper questions regarding length of time that someone would plan to be in the home. It’s something I always ask just to be clear so I can tailor the loan to just what they need. Anyway, yes to answer your question, you sure could come in and say I want a no YSP loan and just pay points up front. WHO CARES!! I agree that many people should do that but they won’t because they read the “points are bad articles”
    And yes John, people can afford closing costs which are 3-4% of a home price so not 1.3k per 200k home but 6-8k but not any additional points. That or they don’t want to do so. The fact is people move much more than you think and or refinance, that’s why you ask the questions but I have seen people come back to refinance over and over again. Thanks for writing in again but please read and think about what I have written.

12. Matt Says:
    August 26th, 2008 at 8:20 am

    People like Cameron and John make me sick. Its almost as if they feel we are not allowed a fair wage. Guys we are not going to work for free. Mortgages are complicated and stressful. We are going to make money on your loan. Like it or not.

    Bottom line: The higher the rate the lower the cost as the cost is covered by YSP. You want a lower rate, perfect, there is no YSP and you can pay the points. Take your pick. If you feel like you cant trust your broker then you shouldnt be dealing with them.

    Yes it may end up costing 24k over 30 years given the situation you mentioned above, but what if the borrower only is planning on staying in the home for 1 or 2 years? Does it still make sense to pay points. If you answer is yes then you need your head examined and double check your educational certificate and make sure it wasn’t stamped by sesame street.

    I will tell you, both of you are probably the worst clients to work with. When I have a jerk as a client I will charge them extra for just dealing with them. Think thats unfair? tough…. don’t be a jerk when you are looking for a loan.

13. loan officer Says:
    August 21st, 2008 at 9:45 am

    Cameron, that’s the whole point about YSP, there is NO BROKER FEE so this is how I make my money.

14. Cameron Says:
    August 20th, 2008 at 7:03 pm

    Well said John.

    Oh and Steve, since you are so smart, how about you sign a contract with me. The terms are this. You borrow 3k from me and when we hit 10 years you give me 9k. What! You say that is not fair.

    Listen, if Brokers would just disclose the YSP up front then you wouldnt even have this discussion but since they dont, and people have learned post escrow how they got screwed out of getting a better interest rate, then I say Brokers deserve to be lumped with the rest of the folks that omit material facts (ie. fraud).

    This garbage about “brokers need to get paid too” is a crock! What do you call the 1%-2% broker fee they are charging? Hmmm…looks like a paycheck to me. Oh you mean you want 6k-9k for pushing paperwork for one home. I am sorry, my 3rd grader can do that (thanks Steve for the reference).

    So in closing, honesty is the best policy!

15. steve Says:
    July 31st, 2008 at 9:14 am

    Definitely a public education… and it appears from your writing skills no higher than a 3rd grade level.

16. John Says:
    July 30th, 2008 at 5:57 pm

    Firstly, Steve, I have had more education than you will ever have in a lifetime.

    Secondly, if you followed my logic of 0.5% to 0.75% interest, then you will know where the 24k to 36k comes from… if its too hard for you, here it is… 0.5% increase (on a 6.5% PAR rate) will make you PAY 24k MORE on a 30 year term on a 200k house… The more expensive the home loan, the MORE you pay… the 0.75% increase will increase it to 36k… and yes, I did the math already. How much is it? Well that depends on how greedy the broker is, the higher they push it the more money they make (or do you deny that fact?). I have yet to see any 200k house have a closing cost of 24k… could it be a lot less? Sure, but not likely and given the subprime market, it most absolutely is NOT… unless you like to pretend not to look at the subprime markets which IS where most of the YSPs were targeting with their ARMs or was that just a bad nightmare?

    Okay, instead of paying a closing cost one-third the size of the YSP, you are paying triple the amount but at least its spread over 30 years… how many of you have told that to your clients? What’s that? None? Oh, that’s right… you guys are so forthcoming to it that it stays hidden until the closing date… how very nice of you… and even then, do you are to explain it to your borrower? No? Yeah, I like to keep secrets from my clients because thats the honest way of doing business with them, especially when they are the ones losing money and you are making money from it… How many tmies have you ever explain YSP to the client and LET THEM CHOOSE… none? Does that sound about right? Why are you so afraid of them choosing? Why are you so afraid of them knowing about it?

    YSPs are handy if you don’t stay in your home for a long period of time, I will give you that… but how often do YOU ask how long they plan on living in their house before giving them the rate??? Never?? Oh that’s right, you assume the worst case scenario and make everyone pay more instead of paying less… because it also pays you more. So if I walk into a broker and ask for a home loan and tell them I plan to live there forever, they will give me a quote that has ZERO YSP in it?? I don’t think so. Everyone I known has stayed in their houses for 10+ years… why are they target with YSPs, would the broker care to refund them the extra money they paid for the YSP? No? YSPs don’t cost anything out of our pocket? Thats some weird logic… You pay more interest which goes to the lender which is prepaid to the broker, without the increase in interest rates, you wouldn’t get your YSP, now would you? If it didn’t “cost” me anything now but it “cost” me every month when I make a mortgage payment… unless you think higher interest rates don’t cost anything…

    They can’t afford points, but they can afford a mortgage? Let me get this right, they can afford to pay 1.3k for a 200k house but can’t afford to save enough money for points… you want America to bail these people out later down the road to? Would you like fries with that? Not everyone is in the same bucket, because the responsible ones WOULD have a down payment and closing cost ready… down payment IS an incentive for people to not do a foreclosure, they risk nothing otherwise, they merely paid rent before the foreclosure happened… these are the type buyers I rather have not because I am elitist but because it doesn’t cost America a dime, unless you think the housing bailout is “free”…

    The 20k-30k is the profit that the lenders make and they kickback the profits of 1-3k back to the lender depending on how much the YSP and the amount of the home loan (I am using a 200k home as reference). That means a 1 M+ home can get you 10k profit from a YSP…

17. Brent Says:
    July 30th, 2008 at 12:09 pm

    Dear John,

    I won’t be as brief with you as Steve was but honestly I think he was correct about you in his two sentences. I wonder after reading your post did you even read mine?? Your post can’t be accurately rebutted becuase you make to many WAG’s. You say that YSP raises your rate 0.5 to 0.75 percent. Maybe it does, depends on the amount of YSP. It could be more, it could be alot less. Your numbers are just a guess. Secondly you claim that YSP causes 24-36k in higher interest charges.
    Well which is it? I mean pick a rate and figure it out, it’s not that hard. Since you don’t mention a rate and have two different numbers your point is invalid. You also didn’t mention that this payment whatever the amount is would be spread out over 30 years. That makes a big difference on the bottom line. That’s WAG #2
    On the subject of no closing cost loans. You are partially correct. We use the YSP to cover the cost of the new loan. We take what’s left. If you are at 6.5% and I call you to refinance for no cost at 6.125% how is this a bad deal for you? True you may have had 5.875% and paid thousands of dollars in closing costs. Maybe you aren’t going to be in the home long enough to recoup the savings. That’s why you have a loan officer to ask such questions and see what makes sense. The next part you got very very wrong. You make some claim that you somehow pay several “EXTRA” thousand dollars to the broker on top of getting a loan and having your closing costs paid. Even if you had this part right how would this be a bad deal. I will say it again. YOU DON’T PAY YSP AND IT COSTS YOU NOTHING OUT OF POCKET!! John, please reread why the loan was good for her at 6.5% and 6.0% wouldhave caused her to not have a loan.
    If you don’t understand let me know and I will explain it. 2)Real quick, YSP has nothing to do with LTV but paying points, increases the loan size. That increases your DTI. That means at some point that DTI goes to high and the loan is denied. That’s what happened here. It is very common. Or they don’t want to pay points. Or they have to pay them out of pocket and I promise you NOBODY likes that. You need more education on this point, it’s clear from reading your comments about bribes and bad lending you don’t really understand what you are talking about. Please understand I am not trying to offend you, it’s just that you understand about half of the information. I am happy to teach you what you are missing.3) Now this is an insulting elitist comment that shows a lack of understanding what it’s like to buy a home and not have extra money just lying about. You think EVERYONE should just wait until they can pay2-3-5 thousand dollars in points? And NOONE should buy until they can/want to do so? Yes John, I am saying that many first time homebuyers can’t afford to pay points. Each case is different, sometimes it makes sense to pay and sometimes it doesn’t but for you to just lump everyone into the same bucket makes no sense. I have done loans for first time home buyers that were great risks but didn’t have a ton of cash. 4) Again I have no idea what you are talking about. You don’t think anyone should work for free but we can’t make 20-30k for filling out paperwork and contracting work out. I wish I could get you in my shoes for a day, you would be so crushed and overwhelmed you wouldn’t know what to do. And as far as making 20-30k per loan, again since you mention no numbers I don’t know where you come up with that number as our profit. On a 200k loan the number you throw around often that would be a fee of 10-15%. Check and see if that is even legal. Or do you think that each loan officer only does loans for 2-3 million? I can only say I wish. John, seriously, I would like to educate you more if you are willing so you know what you are talking about next time. Thanks for writing in.

18. steve Says:
    July 30th, 2008 at 9:03 am

    JOHN, you are a complete moron. UNeducated moron.

19. John Says:
    July 29th, 2008 at 8:22 pm

    I have to disagree and I think this article is very deceptive.

    1) With YSP, you an EXTRA 0.5% to 0.75% in interest rates and on a 200k 30-year fixed rate loan, that is 24,000 to 36,000 in EXTRA interest costs…. is your down payment more than 24k to 36k? Didn’t think so… also there is no such thing as a “no” closing cost loan… you basically made a loan to pay for the “no” closing cost PLUS an extra several thousand dollars to the broker… not a smart idea.. The higher the home loan, the MORE you pay…

    2) Let me get this right, without YSP it leads to more foreclosures because??? You refinance her at 6.5% even though she could do a 6% interest and this prevented foreclosure because?? She is more likely to go into foreclosure with 6.5% interest rate versus a 6% interest rate. What does YSP have to do with LTV or DTI, unless you mean you are bribing the lender to take the loan cause at least they profit by doing it… so you are saying that the lender would not of taken this obviously poor candidate because of the risk but you bribed them into taking it with YSP money? Wait a minute, this whole mortgage mess that is leading to foreclosures was CAUSED by this type of lending…

    3) First time home buyers can’t afford to pay points? Perhaps, they are not ready to become first time home buyers. Better for them to save and pay the points then to pay thousands of dollars for loans without points…

    4) I don’t expect anyone to work for free but I don’t expect to pay them an extra 20-30k for simply filling out paperwork and contracting work out either…

20. loan officer Says:
    July 22nd, 2008 at 9:34 pm

    Joe, actually it’s law that the GFE and the rest of RESPA are disclosed to you within 3 days of APPLICATION. In these RESPA documents is disclosure of your YSP. If your broker waited until you saw the HUD, he broke the law.

    YSP is not there to encourage brokers to sell higher rates. The wholesale lender makes the same no matter what rate on the rate sheet the broker selects. YSP allows the consumer to get a NO point loan. If you get rid of YSP, everyone will have to pay points for their rate. Most people can’t afford this. and most people when given both optins, choose the higher interest rate with NO points and yes the broker is compensated with YSP in this case.

21. Joe Says:
    July 22nd, 2008 at 8:56 pm

    Okay, kudos to you BJ for publishing my criticism. And I am aware, everyone, that brokers generally can get a better deal for their clients then the average borrower can get directly from the bank. However, the HUD-1 comes just a day or two before closing, so if the broker hasn’t explained how the ole YSP works before this (and lots of you don’t, because you don’t have to) then it’s Sorry, Charlie, No Time Now to Get a New Loan. As a disclosure law, this is pathetically weak.

    Regarding the GFE: sure, I just got one from my broker, and yeah, the YSP is there, way over to the left of the page, away from all the other pertinent info in the righthand column so that I didn’t even notice it at all until I studied the GFE for the third time! Needless to say, there was no explanation included with this tidbit of information–no clue as to how this may in fact have me paying a lot more for my house over the long haul.

    The fact remains that the whole reason the YSP exists is to encourage brokers to sell clients higher-interest loans. Otherwise why don’t they pay you just a straight commission regardless of the interest rate? Again, it would be one thing if the average mortgage broker said, hey, this is how I get paid by the bank, but here is how it breaks down for you in terms of your interest rate difference. If you’d like the lowest rate possible, then let me know, but you might have to make up the difference by paying me or my company a fee directly. You know, something honest like that.

22. Brent Says:
    July 22nd, 2008 at 9:33 am

    Joe,

    I couldn’t disagree more, YSP as a broker is disclosed by law on the HUD-1 every single time. It is also checked as a percentage on the GFE Please reread my orginal posting; if you want to your options as to low interest rates, fees and potential benefit, find a good honest broker and ASK. Seriously, ask for options, look at a few lenders, spend some time and ask some questions. And remember, if it sounds too good to be true, then it probably is. If you ever have any questions for me just say the word.

23. BJ Says:
    July 22nd, 2008 at 7:54 am

    Joe
    IT IS THE LAW. MORTGAGE BROKERS HAVE TO DISCLOSE YSP. THAT MEANS MOST YSP’S ARE DISCLOSED. And if not, you should report your broker to your state.

    and GEE, LOOKS LIKE THIS IS PUBLISHED.

24. Joe Says:
    July 21st, 2008 at 9:58 pm

    It’s really great to see this so-called blog with all you brokers patting yourself on the back about what an honest living you make. YSP’s are not disclosed in any understandable way by most brokers and you know it. As a consumer, I should know up front what my options are as to lowest interest rate, fees, and potential use of the YSP for my own benefit. Just because you don’t completely hide this kind of fee like the banks do does not make it right.

    Gee, I wonder if you’ll publish this…

25. Good Faith Estimate changes | Mortgage Blog Says:
    April 10th, 2008 at 1:36 pm

    [...] can increase and by how much, and whether the loan has a prepayment penalty or balloon payment. Yield spread premiums, which affect the interest rate charged must also be disclosed on the GFE.  Total estimated [...]

26. Brent Says:
    April 9th, 2008 at 11:28 am

    Glen,

    Thanks for your input. You can call it comission, profit, income, I think labels such as that are meaningless. Bottom line is that YSP as broker is disclosed on a good faith estimate, and again at settlement. There are numerous other disclosures out there that vary by state. If it matters to the customer so much why don’t they ask?? Personally though I don’t really think it’s any of your business what I make on a loan. I am getting life insurance tonight. I have no plans to ask him what his comission is on our policy. I decided what I wanted as far as coverage and type and then shopped who had the lowest rate. That’s what a person should be shopping on a mortgage. Rate, fees and service. To say it’s sneaky is not being totally honest and as I just pointed out the questions really is irrelevant. Throwing rocks at the profession isn’t really needed either. There are good and bad brokers out there just like in any profession. What I would like to see is that fly by night guys and the scam artists gone which is starting to happen.

27. Glen Wilcox Says:
    April 8th, 2008 at 11:39 pm

    A lot of the animosity toward YSP would go away if you just called it what it is: commission. Then the broker says to the client, “I want you to get this loan, and I’m willing to contribute some of my commission to make the deal happen.” No one objects to sales people earning a commission – what they object to is sneaky verbage trying to mask what is really happening. Take a survey among borrowers and ask them if they know what YSP is. The sneakiness of YSP is what makes mortgage brokers just between used car salesmen and pond scum on the scale of respectability.

28. Steve Says:
    March 1st, 2008 at 12:02 pm

    Brent, I couldn’t agree more with you.

    Idiots like Rob Blake do what they do because it gets him attention. Without taking his stance, none of us would know of this obnoxious snake oil salesman. Thank you for calling this guy out, it’s about time! I really feel sorry for anyone he has duped or actually gives him the time of day. There’s one born every minute and there’s always a guy like Rob handing out the Kool-Aid.

    Guys like you may not be well known, but you should pat yourself on the back for doing things the right way and not looking for niche marketing to exploit at the expense of your clients, and the integrity of the industry.

    Steve D., President e-clu, Los Angeles CA

29. John B Says:
    December 21st, 2007 at 11:01 am

    good post. the govt. needs to stay out. ysp is a good thing. don’t punish all of us because of the few brokers who abuse clients.

    Current LO

30. loan officer Says:
    December 21st, 2007 at 12:17 am

    Great post Brent! I will link to this post to help you get the word out. Anyone who agrees in principal, please LINK TO THIS POST with “Yield Spread Premium” to help it show strong in the search engines. We all need to help so this pending anti-ysp legislation never goes through.

Leave a Reply

You must be logged in to post a comment.