Why Bankers Don’t Disclose SRP - Part One
Filed under: SRP, Underwriting, YSP — admin @ 12:12 pm
Brokers have been required to disclose YSP (yield spread premium) on the HUD and GFE to their borrowers for years now, while bankers are not required to disclose their SRP (service release premium). The argument has been bantered around for years by brokers that this creates an unfair playing field and that bankers should be required to disclose SRP to create parity.
This piece will attempt to explain the fundamentals of why it is not possible to disclose SRP; however it makes no attempt to address the debate on the clarity, equity , or illumination of YSP disclosure. Ideally, both sides will gain greater clarity of how to address the issue without throwing out a red herring, like bankers disclosing SRP, and deal with the broader issues needed to effect real changes in consumer protection, parity in opportunity and mortgage reform.