Fair Lending Evaluation Center

Mortgage lenders sometimes originate loans through mortgage auditing companies or finders who locate clients for the lenders. These finders represent to the homeowners that they are working for them to help them obtain the best available loan.

These finders are working for lenders who pay finders' fees to refer borrowers to them. Finders may steer borrowers to the lender who will pay them the highest fee, not to the lender who will give the borrower the lowest interest rate and fees. Lenders may charge an interest rate higher than that for which the borrower would otherwise qualify in order to pass on to the borrower the cost of the finders’ fees. On loan closing documents, the industry uses euphemisms or their abbreviations for these: yield spread premiums (YSP) and service release fees (SRF) or Paid Outside Closing (POC). The industry also calls this bonus up-selling or par-plus premium pricing.

We suggest that you seek the advice of a trusted business advisor and obtain mutiple quotations of your estimated fees and closing costs from several lenders before making a decision.