Glossary of Real Estate Terms (Oregon) – Y – Z
Yield Spread Premium (“YSP”) – The payment mortgage brokers receive from lenders when they sell consumers a mortgage carrying an interest rate that is higher than what a borrower might otherwise qualify for (“the spread”). The higher the rate, the larger the spread, and the more money the broker can make. Some critics have charged that YSPs are nothing more than a “kickback” by the lender to the mortgage broker for steering consumers – many of whom are already credit challenged – into high-cost loans they cannot ultimately afford. Some studies have confirmed that a large percentage of all subprime loans included YSPs paid to the mortgage broker. Although YSPs are disclosed on the HUD-1, they were not clearly described nor pointed out, and accordingly were either ignored or misunderstood by many borrowers. On the other side of the coin, many mortgage brokers argue that some of the YSP is used toward borrowers’ loan costs thus enabling them to obtain a loan with less up-front money. However, some might say – in retrospect – that the inability to pay these up-front costs is an indicator that perhaps the borrower should never have qualified for the loan in the first place.
Zoning – Laws mainly established at the local (that is, city and county) level affecting the uses of land within its jurisdiction. These laws are used to determine permissible areas for residential use, non-residential use, agricultural, farming, industrial and business use, etc. Local zoning ordinances may also govern other things such as structural type, lot and building size, height restrictions, setbacks, and many other aspects of how land is to be used and how growth is to be controlled.