I for the life of me cannot understand why the Government or Consumers care about YSP (yield spread premium) or broker compensation!
The Challenge—-Can anyone name a product or service that the consumer buys based on the profit margin and not the cost to them?
Why Consumers get hung up on what the par price is or what the YSP or SRP just baffles me!
Knowing what the profit margin is, may help you negotiate better with a loan officer that is trying to take advantage of you. I would bet most if not all good loan officers know what they charge and the rates and terms they offer will change not based on how much they can get from an unsuspecting borrower, but by how the market moves. A loan officer that is willing to negotiate is a loan officer you want to avoid!
Personally I would be wary of any lender or broker that tries to Spin the compensation positively or negatively in order to convince you to choose to work with them. Cost and service will vary between lenders….What you the consumer value most will vary so the lender/broker you choose will be different based on what you value most.