Yield Spread Premium Disclosure
Wholesale mortgage brokers in TX must disclose yield spread on GFE when working a residential loan. Is this the same for Commercial Lending? I am a loan officer working on my first commercial project and the lender has issued a letter of interest. The borrower wants to know if the rate quoted by lender is par or if yield spread is being paid. How should the request be handled?
Honestly.
Ask the lender first how your fees need to be documented. Most lenders require a broker fee agreement, if they are not paying your fees directly. Be it through you or the lender, there has to be a fee agreement. Just ask the lender--they are (supposed to be) there to protect you.
As an investor I would never work with a broker who tries to hide YSP. The whole YSP practice seems deceitful to me and a way for brokers to get extra income at the borrowers expense without them knowing it. I have run acrross it and will not work with a broker who tries to get YSP and does not put their entire fees on the HUD in one payment amount at closing.