About 2 weeks ago, I had someone contact me in regards to an article that I wrote about a year ago. The article discussed YSP - What it is and how to use it. She got the GFE and saw over 2% being collected in YSP. It was because of this that she did the search and found my article.
In the article, I mention that many brokers will tell their clients not to worry about this fee. It is paid to them by the lender. Wouldn't you know, that is exactly what this broker said to this person. After reading my article, she knew that this was not true. She was paying for it in a higher interest rate.
Here is where I need your opinions: I have directed this person on how to negotiate the YSP to her advantage. She is going to be living in the house for 7+ years and sees that having the higher interest rate will end up costing her more in the long run. She has no adversions to paying the fee on the front end. I also instructed her to request a copy of the rate lock to verify that there is no YSP, or as close to Par, be collected. The broker is refusing to give her a copy of it. Instead, he sent her an email saying that her rate is locked at x% for X days. Should I tell this person, who is coming to me for professional advice, to keep insisting on the rate lock or should I give her the name and phone number of a broker that I know in that area to have them handle the transaction?
I am leaning more towards the latter only because this person is taking advantage of this person's original ignorance to the mortgage process. The borrower has high credit scores, excellent income, and a large down payment. When I originally reviewed the GFE, not only was there 2% in YSP there were also over $1,000 in junk fees. Oh, and did I mention the application fee that they are trying to get out of her before they will move forward on processing the deal.
What would you do in my position?