Charging a broker fee vs. yield spread — what's your model?

Brian, both models are legitimate. Here's the breakdown: Broker fee (points): + Transparent to borrower + Predictable income + Borrower knows exactly what they're paying - Borrower may negotiate - Requires disclosure in most states Yield spread: + Can be more profitable on some deals + Borrower sees a "lower" rate - Less transparent - Regulatory scrutiny has increased - Some lenders don't allow it My model: I charge a disclosed broker fee (1.5-2 points) and don't do yield spread. It's cleaner, more defensible, and builds trust with borrowers. The brokers I know who do yield spread spend a lot of time managing disclosure requirements.

Robert — the transparency argument is compelling. I'm going to stick with the broker fee model. Thank you.

Broker fee. Always. Yield spread creates too many compliance headaches in today's environment.

Been doing this 20 years. Yield spread was common in the 2000s. The regulatory environment has changed. Disclosed broker fee is the standard now for good reason.