Does the 8 point limit include the YSP?
Maryland’s limit on broker fee (called “finder’s fee”) is 8% of the amount of the loan or advance. “Finder’s fee” includes “any compensation directly or indirectly imposed by a broker and paid by or on behalf of the borrower for the broker’s services . . . .” [Emphasis added]. This definition suggests that compensation paid by the lender to the broker (often called “YSP”) could be included in finder’s fee. However, the Commissioner’s office does not take that position and, instead, takes the position that lender-paid broker fee is NOT included in finder’s fee. (Indeed, we believe the Commissioner’s office is required to take the position that lender-paid broker fee is NOT included in finder’s fee based on on statements made by the then Commissioner Fell at the hearing on the law that clarified the meaning of finder’s fee.) Please note, for compliance with RESPA Section 8, I always recommend that a Maryland broker limit its aggregate compensation (i.e., fees paid directly by the borrowe
