YSP Why and Where – Point 101

BJ Bounds

The new GFE has generated countless questions and more confusion than even we could expect.   If you haven’t already seen it, the Niche Report published an article by Joshua Weinberg that really helps walk you through the process and explains it in clear detail.  You can find the article here.

But if you would prefer to step through the process in Point specifically, I’m about to make your day.  This is all about the YSP and how you report it in your software so that it appears in the correct spot in the borrower’s file.

Yield Spread Premium (YSP) will ONLY be considered as a credit to the borrower. All compensation to the Originator expects to receive must be clearly indicated up front, and may not change. This means that Originators are required to enter any and all amounts they desire to be compensated with on line item 801: Loan Origination Fee on the Initial Fees Worksheet.

  1. Go to the Initial Fees Worksheet.
  2. In the Compensation to Broker section, enter the YSP.
    **You must enter YSP here so that it will transfer to the GFE 2010 as a credit.
  3. Scroll down to the 1300: Additional Settlement Costs section.
  4. Enter the YSP into any of the user defined fields as a negative number. (For example: -2000)
    **You must enter the YSP again into this section so that the YSP is applied as a credit on Loan Application Pg. 4 to be included in “Cash to Close.”
  5. Go to the Good Faith Estimate 2010.
  6. Check the box, Borrower receives a credit of…
    **Checking the box applies the YSP as a credit on the GFE 2010

That’s it!  If you would like to see screen shots illustrating these steps, go to article # 0678 in our Knowledge Base.

4 Responses to YSP Why and Where – Point 101

  1. Jesse Lopez says:

    Per the RESPA Reform all broker / lender compensation must be reflected in Block 1 Our Origination of the GFE. Calyx is not carrying the YSP into the Our Origination Block of the GFE. Per the instructions in the Completing the Good Faith Estimate (GFE 2010) found in the Help Section of Calyx: Our Origination Charge field is populated with the sum of the following fees that are itemized in the Items Payable in Connection with Loan section on the GFE:
    Lender’s Inspection Fee 805
    Mortgage Broker Fee 808
    Processing Fee 810
    Underwriting Fee 811
    Wire Transfer 812
    User-Defined Fees 813-822 which is where we are putting the YSP however it is not adding it to Block 1

    • CalyxCorner says:

      Hi Jesse. The originators must include the exact amount they will be compensated on line item 801: Loan Origination Fee, YSP does not affect the originator’s compensation directly; it simply reduces the borrower’s closing costs. Items that are included in Block 1 Origination Charges are: Line Item 801, 805, 808, 810, 811, 812, and the User defined Drop-downs in the 800 Section of the Initial Fee Worksheet. As an example, if there is a 2% YSP given as a Credit from the Lender to the Borrower, the Broker must enter 2% in the Compensation to Broker Section of the Initial Fee Worksheet (incorrectly titled, but will be renamed to credit to the borrower soon), the Amount that is listed in this location will carry over to Block 2 Borrower Receives a Credit of 2% in the Good Faith Estimate. If the Broker wants to be compensated by the Borrower the amount of YSP of 2% the Broker must also include this in Origination Charges by entering it in any of the line items listed above–many use 801. If you have any more questions, please call our tech support team at 800-342-2599.

  2. Rylan Rozell says:

    If the YSP is being credited to the borrower, can it be used for both non-reoccurring and reoccurring costs?

    And if there are seller concessions, should those be applied to closing costs before deducting the YSP?

    • CalyxCorner says:

      Hy Rylan. Your lender would be the best person to ask about non-recurring vs recurring costs.

      But yes, seller concessions should be applied before deducting YSP.

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