Finance (alternative)
The 'yield spread premium' (YSP) paid by lenders to mortgage brokers was regulated by RESPA because it:
AHelped borrowers by reducing closing costs
BCreated incentives for brokers to steer borrowers into higher-rate loans for additional compensation✓ Correct
CReduced the lender's risk exposure
DWas a required government fee
Explanation
YSPs created a conflict of interest — brokers could earn more by placing borrowers in higher-rate loans. RESPA and the Dodd-Frank Act's provisions addressed this through disclosure requirements and other regulations.
Related Maryland Finance (alternative) Questions
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