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?

Comments(2)

  • ffstrategies4th May, 2007

    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.

  • cmiller998618th July, 2007

    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.

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