Mortgage Yield Spread Premium
Mortgage YSP: broker originates above par rate; lender pays spread. Example: 5.5% par, 6.0% originated = 0.5% YSP to broker. Dodd-Frank: prohibited dual compensation, required disclosure, prohibited term-based comp, and created QM standard. Choice: lender-paid (higher rate, lower costs: short-term) vs. borrower-paid (lower rate, higher costs: long-term). Calculate break-even. Compare both options. FL follows federal rules.
How It Works
- Above-par = YSP payment
- Borrower: higher rate, lower costs
Dodd-Frank
- No dual compensation
- Disclosure required
- QM standard
Borrower Choice
- Short-term: lender-paid
- Long-term: borrower-paid
- Calculate break-even
Related Terms
Barnes Walker Real Estate
Barnes Walker’s attorneys handle FL mortgages. Request a legal inquiry.
Florida Law Reference
Fla. Stat. Ch. 697
Defines mortgages as liens on real property and establishes requirements for mortgage creation, assignment, and satisfaction in Florida.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC