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Old 04-04-2008, 05:34 AM
 
29 posts, read 133,327 times
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I've been hearing about yield-spread or something like that. Not too sure what it is about, but I was told that a broker normally shows how much percentage of the wholesale rate is he/she using for profit. Is that true? If so, what term is usually used on a GFE to show this?

Thanks!
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Old 04-04-2008, 08:39 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,333,443 times
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YSP Yield Spead Premium.....should be one of the last lines in the 800 section

or

You will find it at the bottom of the GFE.

If you're getting the best rate/fees then I wouldn't worry about how much money they make. Just think if you go to the bank..they dont disclose it...and they are making a lot more than the broker.

Quote:
Originally Posted by DataCollector View Post
I've been hearing about yield-spread or something like that. Not too sure what it is about, but I was told that a broker normally shows how much percentage of the wholesale rate is he/she using for profit. Is that true? If so, what term is usually used on a GFE to show this?

Thanks!
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Old 04-05-2008, 10:51 AM
 
Location: Cary, NC
1,036 posts, read 3,685,421 times
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Default Ysp

Quote:
Originally Posted by DataCollector View Post
I've been hearing about yield-spread or something like that. Not too sure what it is about, but I was told that a broker normally shows how much percentage of the wholesale rate is he/she using for profit. Is that true? If so, what term is usually used on a GFE to show this?

Thanks!

It is an 800 line as was mentioned. It should be the last one, but at the time of the GFE its usually given as a percentage from ___ to ____ % of the loan amount. That is because until you are approved and lock a rate the broker will not know the YSP.

The YSP for a particular rate goes up and down with the market and varies by program, credit score and other factors. That is what makes pricing a home 30-45 days or more upfront hard.

Other than GFE, the broker will also make the origination fee and mortgage broker fee (if any) on the loan. Processing, underwriting and/or application fees (if any) typically go to the lender and the person performing the work, not the broker.

A bank is the same EXCEPT they do not have YSP, they have SRP. Although it is THE SAME THING, banks are NOT required to disclose their SRP, so their true profit is "hidden".

So just because they may look cheaper on a GFE, banks are not... they just do not disclose as much as brokers (they also do not have licensing, background and education requirements of brokers in most states). Makes it hard to compare apples to apples, but the banks have far more lobbying money.
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