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  1. #1
    Join Date
    Jan 2007

    Scammed...Yeild Spread Premium

    We recently built a home and were shocked when received our final paperwork and saw that our note was 600.00 more than what we were told. Our lender said it had to do with the way our mortgage broker set up our loan. He said he set it up with a yeild spread premium. What is this and what can we do?

  2. #2
    Join Date
    Jan 2007

    Re: Scammed...Yeild Spread Premium

    YSP or Yield Spread Premium is an incentive the lender gives the broker/loan officer for giving them your loan to service. Usually the higher the rate the more YSP the broker gets. The lower the rate the less the broker gets or you as a borrower may even have to pay the lender a discount point to get a very low rate. There is a rate that every lender offers thats at par which means no incentive to the broker or the borrower would not have to pay.

    If your payment was $600 more:

    1. Was the rate the same as what your loan officer initally discussed with you?

    2. Your initial figures were only estimates. What figures changed during the course of the loan process?

  3. #3
    Join Date
    Jun 2005

    Re: Scammed...Yeild Spread Premium

    $600 is a huge amount for a payment to jump. What was the loan amount?

    Are sure the original estimate excluded Taxes and insurance and the final numbers included? That sounds more likley.

    Hard to tell from the limited info you gave, but the "lender" sounds like their talking out of their [hind end].

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