Eliminating yield spread premium starts by avoiding banks like the plague. Bank mortgage rates will always include their version of YPS since they have no legal duty to disclose it.

(In the banking world YSP is call service release premium. This “different” classification was the legal technicality or loophole the industry used to legally avoid consumer disclosure altogether.)

Mortgage yield spread premium is responsible for up to two thirds of the revenue earned on every mortgage. Yet most Americans have no knowledge of mortgage yield spread premium or how to avoid it.

Locating the yield spread premium rip-off is virtually impossible except at closing on the settlement statement known as the HUD1 Settlement Statement. Of course, by then it’s too late!

Other non settlement statement mortgage disclosures specifically the Good Faith Estimate (the mortgage application disclosure) are useless for discovering yield spread premium overcharging since most brokers either never disclose or obfuscate the disclosure as you’ll see below.

A Good Faith Estimate is a legally required mortgage document showing costs, rate, and payment. Believing the Good Faith Estimate reflects truthful, accurate, and guaranteed figures is folly.

Nothing could be further from the truth.

The Good Faith Estimate is manipulated by the loan officer low balling the costs and rate morphing it from a mortgage disclosure into a selling tool. It does not reflect real mortgage rates or actual closing costs.