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 origination fees, broker fees or discount points. This “may [be used to] wipe out or offset other loan costs, like Loan Level Pricing Adjustments (instituted by FNMA).”[1]

References
  1. "DFI: Yield Spread Premium (YSP)". Indiana Department of Financial Institutions.


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