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Homebuyers Beware: Who’s Ripping You Off Now?—What You Must Know About the New Rules of Mortgage and Credit by Carolyn Warren

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15. Five Things You Need to Know About YSP

It’s been called the best-kept secret in the mortgage business. Trying to get a banker to talk about it is like trying to pry a secret out of the FBI. If they say anything at all, it’s going to be a cover-up. And the worst part is: This is costing homebuyers tens of thousands of dollars over the life of the loan. What am I talking about?

It’s an important part of your financing, called Yield Spread Premium (YSP). One afternoon, a loan officer treated me to a filet-mignon lunch at the upscale Daniel’s Broiler overlooking Lake Washington and the Seattle skyline beyond. While we were dining, he boasted of making 40 grand in commission on one loan. How? With the Yield Spread Premium.

Another loan officer ...

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