Yield Spread Premium Mortgage Fees Banned by Federal Reserve

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The Federal Reserve has banned mortgage fees responsible in part for subprime mortgage crisisThe Federal Reserve has banned mortgage fees you probably weren't even aware of, but that were inflating your home-loan interest rate. On Monday, the Fed announced it was banning yield spread premiums, or YSPs. YSPs are essentially bonuses that lenders paid to mortgage brokers who steered them high-interest loans. The YSP took on a shady reputation once brokers began directing some buyers toward higher-interest loans, claiming it was the best deal they could get. Subprime lenders were the most frequent users of YSP bonuses, which were rarely disclosed to borrowers.


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