Posted by River City on June 24, 2004 at 11:53:08:
YSP is a “yield spread premium.” A lender might quote a broker 5% on a 30 year loan. The broker then charges the borrower 5.25% for the loan. The yield spread is the difference in the yield on the 5% and the 5.25%. This is legal for them to do and is a good reason why consumers should shop rates prior to settling on a broker, bank, or mortgage company to get their loan. Not all brokers work this way. Some actually use the YSP to benefit the borrower by paying a portion (if not all) of their closing costs. Since the YSP is not listed on your HUD-1, your broker more than likely did not collect a YSP. Nice broker.
recently purchased condo in tampa. good fatih estimate and rate/financing lock in agreement clearly show processing fee for mortgage broker of $499. closing docs and settlement statement do not have the fee. mortgage broker now asking for $499 three weeks after closing. do closing docs override good faith estimate and rate lock in forms??? mortgage broker threatens to send to collection agency and effect my credit. thanks for advice!!!
Re: closing fees vs good faith estimates - Posted by River City
Posted by River City on June 17, 2004 at 12:24:27:
He can’t send it to a collection agency. It’s not a loan agreement, it’s a lock-in agreement. The broker should have reviewed the HUD-1 prior to the loan closing. Most lenders send the HUD-1 to the broker for their approval.
Did he receive a YSP? Look at the HUD-1 (Settlement Statement) on page 2, near the top in the left column. How much was it? Which state are you located in? Who is the lender on the loan? If you pay this broker the $499, it makes the Truth in Lending disclosure incorrect and the lender would not take too kindly to that.
You might want to contact the lender. It should be listed on your documentation indicating where you are to make your payments.