Yield spread premium
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
discount points. This “may [be used to] wipe out or offset other loan costs, like Loan Level Pricing Adjustments (instituted by FNMA).”[1]
References
- ^ "DFI: Yield Spread Premium (YSP)". Indiana Department of Financial Institutions.
External links
- Howell E. Jackson and Jeremy Berry: Kickbacks or Compensation: The Case of Yield Spread Premiums, Harvard Law School
- Yield Spread Premium and HR 3915 — Mortgage News Daily
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