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#161464 - 02/18/04 08:04 PM Yield Spread Premiums
Anonymous
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Is the Yield Spread Premium considered a finance charge? I've read the regs and it seems to be so under 226.4(a)(3). However, for some reason I thought we should not deduct the YSP from the amount financed as we would a normal finance charge because the interest rate/APR was already affected by the YSP. My question is do we always treat the YSP as a finance charge, as we would the loan origination fee, in every transaction no matter if we are a broker or a bank?

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#161465 - 02/18/04 08:16 PM Re: Yield Spread Premiums
Paragon Offline
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"The law says if you are a broker you must disclose yield spread premiums at the top of page two," of the federally mandated Settlement Sheet required on all loans, says Bob Chaplin, president of the National Association of Mortgage Planners.

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#161466 - 02/18/04 08:46 PM Re: Yield Spread Premiums
Anonymous
Unregistered

I realize you must disclose the YSP, but is it considered a finance charge for purposes of Reg. Z?

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#161467 - 02/18/04 09:19 PM Re: Yield Spread Premiums *DELETED*
Dan Persfull Offline
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Post deleted by dpersfull
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#161468 - 02/18/04 09:26 PM Re: Yield Spread Premiums
Paragon Offline
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#161469 - 02/19/04 02:55 PM Re: Yield Spread Premiums
Suwannee Offline
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Florida
Yield spread premiums are normally paid to brokers by the lender for brokering a loan, which means that according to federal regulations, the YSP would not be included in the calculation of the APR. I have never seen a YSP paid by a borrower. Check your state law to ensure that this charge doesn't have to be included in the APR calculation.
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#161470 - 02/19/04 05:12 PM Re: Yield Spread Premiums
Paragon Offline
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Quote:

Yield spread premiums are normally paid to brokers by the lender for brokering a loan, which means that according to federal regulations, the YSP would not be included in the calculation of the APR. I have never seen a YSP paid by a borrower. Check your state law to ensure that this charge doesn't have to be included in the APR calculation.




Actually, YSP's are now being paid by borrower in some cases in order to finance loan costs/fees - it's not a popular thing to do, as far as the regulators are concerned.

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#161471 - 02/19/04 05:50 PM Re: Yield Spread Premiums
Tisa Offline
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Do you know the way to ...
(Can one of the moderators please go in and edit this post so it doesn't keep messing up the screen margins?)
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#161472 - 02/20/04 04:44 AM Re: Yield Spread Premiums
Dan Persfull Offline
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Bloomington, IN
Quote:

(Can one of the moderators please go in and edit this post so it doesn't keep messing up the screen margins?)




Since it was my post I deleted it. Sorry for the inconvenience. I hadn't been back to this post to see there was a problem. This has happened several times over the past few weeks where the url is not posting with the name I assign it but with the entire url address.
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#161473 - 02/20/04 05:14 AM Re: Yield Spread Premiums
rlcarey Offline
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Galveston, TX
Quote:

Actually, YSP's are now being paid by borrower in some cases....




I guess I'm a little confused by this state ? If the borrwer is paying the YSP - wouldn't it then be considered discount points? The interest rate on underlying note would then be at the buy rate if the borrower paid the YSP.
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#161474 - 02/20/04 12:52 PM Re: Yield Spread Premiums
redsfan Offline
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The Pennant Race
I agree with you, Randy. If the borrower is paying it, it isn't a yield spread premium any more. But I am not sure that it would be discount points, since I'm not sure the funds really be to buy the rate down (although I agree that is what should happen).
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#161475 - 02/20/04 01:55 PM Re: Yield Spread Premiums
Cowboys Fan Offline
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SC
Quote:

Quote:

(Can one of the moderators please go in and edit this post so it doesn't keep messing up the screen margins?)




Since it was my post I deleted it. Sorry for the inconvenience. I hadn't been back to this post to see there was a problem. This has happened several times over the past few weeks where the url is not posting with the name I assign it but with the entire url address.




I've had the same problem numerous times.
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#161476 - 02/20/04 03:05 PM Re: Yield Spread Premiums
Suwannee Offline
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Florida
Randy, I agree. I don't believe there is any way that the borrower can be shown as paying the YSP, as these funds actually come from the lender. The borrower would be shown as paying discount points.
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