I’ve given this a LOT of thought, and the only solution I can think of is Disclose the rate sheet with the client and let them in essence decide how they want to compensate you either via upfront fee’s (i.e. origination) or via Yield spread or a combination, but let them set the rate. This could actually be done via a fiduciary relationship, complete with a contract.

The new RESPA guidelines accomplish the same thing, (minus the fiduciary) with Brokers, but not ‘lenders’. After the new year, if someone is dealing with a Bank or an entity that is a “non depository lending institution” AKA Portfolio or Correspondent Lender(s), they are not required to disclose YSP. How this is OK, I don’t know…but it’s how things are currently. As a result the majority of loan officers and brokers are looking into making moves over to lenders.