Review of U.S. Mortgage Companies
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Lender FAQ's
The Lender Review Board couples the resources of both Federal and State regulatory agencies with our own comprehensive review of each U.S. mortgage company.
We actively monitor each lenders rates and fees on closed loans, as well as consumer complaints.
Understanding Yield Spread
Yield Spread Premiums are the cash that Mortgage
Companies get for steering a borrower into
a home loan with a higher interest rate.
For example, if the going offer from a Lender is 6.00%, the broker can make additional money outside of what is disclosed up front on the Good Faith Estimate, by offering you a higher rate. The higher the rate is over 6.00%, the more YSP the Broker will make. The YSP fee the Broker earns is disclosed, but typically only when you've reached settlement and receive a copy of the HUD-1. *There are some exceptions to YSP disclosure for Banks and Credit Unions.
Some Lenders will even offer Brokers "free" YSP in order to get their loans, but there is typically no added benefit to the borrower since this incentive is only in the Brokers best interest.
Another thing to consider are the popular "No Closing Cost Loans" which can be misleading since the fees may not be charged to you up front, but will be collected in YSP. You may not have any up front fees, but your rate will be higher, which means in most cases you will actually end up paying more.
For example, if the going offer from a Lender is 6.00%, the broker can make additional money outside of what is disclosed up front on the Good Faith Estimate, by offering you a higher rate. The higher the rate is over 6.00%, the more YSP the Broker will make. The YSP fee the Broker earns is disclosed, but typically only when you've reached settlement and receive a copy of the HUD-1. *There are some exceptions to YSP disclosure for Banks and Credit Unions.
Some Lenders will even offer Brokers "free" YSP in order to get their loans, but there is typically no added benefit to the borrower since this incentive is only in the Brokers best interest.
Another thing to consider are the popular "No Closing Cost Loans" which can be misleading since the fees may not be charged to you up front, but will be collected in YSP. You may not have any up front fees, but your rate will be higher, which means in most cases you will actually end up paying more.
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