At one time, I was a mortgage broker. In those days, we worked hard for our customers to ensure we got the most favorable deal for them and earning enough revenue to pay our staff and ensure that the office was running efficiently. Along came a travel agent turned radio talk show host(1) known by the name of Clark Howard who proceeded to cast stones and is still doing this. In constant bombardment of mortgage brokers with the label of useless middlemen Howard continually urges his growing listening audience to bypass the smaller more local offices and head straight to the lender, where they can be swindled and not even be aware of the consequences. This article will reveal the happy ending of this tale. Senator Barney Frank (D.MA) is currently considering legislation that would regulate the heavily controlled mortgage broker market. Other leaders , like Barrack Obama, D-IL and Hillary Clinton, D-NY, also mentioned mortgage brokers and how they led the country down a slippery path to financial ruin. The story is not without an end that is happy, however. I'd like to present to you Yield Spread Premium, also known as YSP. When we get to meet Mr. YSP, we will make a quick trip to the soup aisle of your local grocery Mortgage broker license store. Grab that can of store-brand chicken noodles and bring it along to the counter for check-out. The clerk will be charged one dollar and thirty-six cents plus tax. Let's talk about the soup you bought while you wait to meet Mr. YSP. Take the can in your hand and take a close look. At least two of the components are visible as well as the weight of another. You can see the can as well as the label and believe that there is a soup inside that matches the description of the label. You can look at the can and the label, and determine if you bought the soup only or the label and can. You bought the soup in one unit, but what was the cost of the can? What about the label how much of the price of the purchase was accounted for the label? For more detail please visit:- https://andatphat.vn/ https://ohmoney.vn/ The truth is that you don't know , and you don't really care. What you care about is that you purchased a can of soup and paid a fair price. The components were not separately priced. While some components were mentioned on labels, they didn't include the label or the can. Somewhat of a mystery the cost of the can and the label. It's nearing Mr. the YSP's house. You might be wondering what similarities could be between a canned soup and the mortgage. Both are essential to know and look for. Since these products add pennies to the overall cost, you don't need to care about the label or the cost of the container. At the very least, the label and the can probably added only 3 or 4 cents to the cost. Two percent which isn't mentioned in the price really doesn't matter much since you are talking about pennies. What is the difference in the price of obtaining an mortgage from direct or bank lenders or a broker that can assist you with obtaining one? Do you know that mortgage brokers are able to access what's called "wholesale rates"? You probably didn't know that a mortgage broker under federal law, is the only one of those three who are required to inform you every cent of profit they earn on each home loan. It's factual. The direct and bank lender are not bound by the federal law requiring mortgage brokers to reveal the cost of the "can" and the "label". If mortgage brokers are required to disclose every penny earned through their transaction, then why aren't direct lenders and banks? We'll get there, I promise you, but for now we're at YSP. Yield Spread Premium is in line with my needs as a pupil. Pupil, Yield spread is the amount of revenue mortgage brokers earn by negotiating with a lender to locate a wholesale mortgage that suits your needs and also offers a reasonable interest rate. Similar to the way that car makers pay the dealer a percentage of the retail value when they sell a vehicle. Without YSP the fees at the beginning would be higher and the loan would cost more. As we're discussing this, I'd like to bring up the Columbia University Study which unequivocally shows that the cost of doing business with mortgage brokers is lower than that of going directly to the bank or lender. Clark Howard, a talk-show host, was forced to swallow a few words in the last few days. He then forgot and is now making a whole many unsubstantiated accusations. YSP works in this way: The borrower can get the loan for 6 percent interest, while the broker could get the same loan for five points, seventy five percent interest. There's a tiny difference in the wholesale rate and the retail rate. Wholesale rates are call"par" rate "par" rate. There is a variance between the wholesale rate and retail rate, the lender will, after the closing, pay the broker a charge for the difference . That fee is called Yield Spread Premium. The cost of making loans has increased to around twenty-five hundred dollar(3). Mortgage brokers, just like the lender or bank be able to make a profit to keep their company in operation. Other loans might be more expensive to originate since certain costs aren't fixed but are calculated in percentages. Originate means attract the client to fill out the application, make all of the necessary steps to get that loan through to its closing. The cost for the soup the same way as the mortgage. The soup would cost you no more, but you'd be able to see every part of the receipt. Your receipt will be referred to a Housing and Urban Development Settlement cost document (or HUD-1). The price of the can would be similar to that of direct lender or a bank. But it is not required by law for lenders and banks to disclose the price. Brokers are the only ones who must divulge. YSP is one of the profits a mortgage broker makes. They still earn more than brokers, but they aren't required to disclose. The lender is paid what's known as an Service Relief Premium if they sell the loan, or the Servicing Premium when they hold the loan in their records. Usually SRP is anywhere from three percent to 10 percent depending on the selling of the loan on the secondary market which is not in any way to anything to do with the borrower. It takes place after the closing has been done. The bottom line and the reasons you should be aware of YSP but why elected officials like Dodd and Franks are beyond their reach and intending to harm you more than they help by making mortgage brokers the focus of their attention and removing this type of commission. Visit the lender directly to get an estimate, then visit an agent for mortgages and request an estimate. They'll be within one hundred dollars of one another. The broker will have access to numerous lenders and can browse a variety of banks and lenders through one application. Yes, there has been an abuse, but that was because you weren't aware of the trick. You know now the trick. Brokers, just like banks, lenders, and you in your job have to be paid. A small portion of brokers are abusers of the system. Any additional legislation will limit your options and make it difficult to figure out how much someone earns. Banks and lenders will not be supporting the demise of YSP and funding campaigns to support those who wish to eliminate the wholesale mortgage broker industry. Because banks and lenders do not have to disclose their earnings like mortgage brokers.