Finance
A Texas lender who uses 'yield spread premium' (YSP) is receiving compensation for:
AOriginating the loan on behalf of the borrower
BPlacing the borrower into a higher-than-par interest rate, with the premium paid by the investor✓ Correct
CProviding the appraisal service
DIssuing title insurance
Explanation
A YSP is compensation paid to a mortgage broker for placing a borrower in a loan with an interest rate above the lender's par rate. Under TRID, all lender and broker compensation from the transaction must be disclosed on the Closing Disclosure.
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