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Yield spread premium information


A yield spread premium (YSP) is the money or rebate paid to a mortgage broker for giving a borrower a higher interest rate on a loan in exchange for lower up front costs, generally paid in origination fees, broker fees or discount points. This “may [be used to] wipe out or offset other loan costs, like Loan Level Pricing Adjustments (instituted by FNMA).”[1]

  1. ^ "DFI: Yield Spread Premium (YSP)". Indiana Department of Financial Institutions.

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Yield spread premium

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A yield spread premium (YSP) is the money or rebate paid to a mortgage broker for giving a borrower a higher interest rate on a loan in exchange for lower...

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indication of the risk premium for one investment product over another. The phrase is a compound of yield and spread. The "yield spread of X over Y" is generally...

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of the term premium, long-term bond yields tend to be higher than short-term yields and the yield curve slopes upward. Long-term yields are also higher...

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serviced as opposed to sold/brokered. Brokers must also disclose Yield spread premium while Bankers do not. This has created an ambiguous and difficult...

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Mortgage bank

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other hand, earning the same yield spread premium, disclose the additional fee to the consumer because the yield spread premium becomes an additional fee...

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Spread trade

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Spread trades are usually executed with options or futures contracts as the legs, but other securities are sometimes used. They are executed to yield...

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Yield to maturity

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The yield to maturity (YTM), book yield or redemption yield of a fixed-interest security is an estimate of the total rate of return anticipated to be...

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Risk premium

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Equity Risk Premium: A Benchmark Model Ruben D. Cohen (2002) “The Relationship Between the Equity Risk Premium, Duration and Dividend Yield (download)...

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Glossary of US mortgage terminology

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These payments on interest leave the principal balance unchanged. Yield spread premium A par rate is the lowest interest rate a borrower qualifies for,...

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case the broker receives a credit or what's called yield spread premium (YSP). Yield spread premiums are the cash that a mortgage company receives for...

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item/property Words of conveyance Wraparound mortgage Writ of attachment Yield Yield spread premium Zoning Zoning map Zoning ordinance – local ordinance that controls...

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behavior of yield curves for interest rates. The upwards-curving component of the interest yield can be explained by the liquidity premium. The reason...

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than its par value, the bond is selling at a premium. For this and other relationships between price and yield, see below. If the bond includes embedded...

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no-arbitrage assumption, the net premium paid out to acquire this position should be equal to the present value of the payoff. Box spreads' name derives from the...

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the airline. Yield management spread to other travel and transportation companies in the early 1990s. Notable was implementation of yield management at...

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unit of par value, whereas current yield is the ratio of the annual coupon divided by its current market price. Yield to maturity is a bond's expected internal...

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inverted yield curve is a yield curve in which short-term debt instruments (typically bonds) have a greater yield than longer term bonds. An inverted yield curve...

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Premium financing

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Corporate debt yields are less than personal debt rates. As such, premium financing may carry a negative spread for the client financing the premiums. Indexed...

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Negative amortization

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also increase the borrower's interest rate, but will improve the yield spread premium which the loan originator may receive as compensation from the lender...

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Convertible bond

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redemption date. Yield: Yield of the convertible bond at the issuance date, could be different from the coupon value if the bond is offering a premium redemption...

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YSP

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Party of Greens and the Left Future (YSP), a Turkish political party Yield spread premium, a cash rebate paid by a lender to a mortgage broker if the broker...

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Novation Companies

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grounds. A third class action concerning NovaStar's charging of yield spread premium fees, fees paid by the lender to the broker which has come under...

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Options strategy

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bull spread. A bear spread is a spread where favorable outcome is obtained when the price of the underlying security goes down. If the premiums of the...

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Callable bond

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issue price. In certain cases, mainly in the high-yield debt market, there can be a substantial call premium. Thus, the issuer has an option which it pays...

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The equity premium puzzle refers to the inability of an important class of economic models to explain the average equity risk premium (ERP) provided by...

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