Junk Fees in Mortgage

At the first mortgage company I worked at, they were standard. I think they added up to $1,100 FLAT on every loan.

This outfit is charging based on purchase price.

1% origination is actually not all that bad. That's what the lender's going to make in pure profit & few if any mortgages don't make money in that respect on the Origination. The loan officer is typically paid a commission off of the % of origination & the rest goes to the company he works for.

If its a bank I'd wonder why you're paying 1% and whether their LO works on commission.

.5 Administrative fee looks like its designed to keep your Settlement Statement or HUD-1 clean and appear as if the % number is a relative bargain. We had about a half dozen separate "junk fees".

We called them stuff like "Administrative Fee", "Doc Prep" Fee, "Processing Fee", "Archive Fee" & sh!t like that.

All designed to dizzy you. The Broker-myself-would calmly explain them matter-of-factly as the cost of doing business & closing the loan.

I don't know how much your total loan amount is but lets just say its $300,000.

That's a $1,500 Administrative Fee along with a $3,000 Origination.

The total fees generated-which is what I was paid on at almost every stop in the mortgage biz-adds up to $4,500 not counting other legit fees like Underwriting & Recording Fees which have to be paid to Underwrite the file (approve it) and file the mortgage at your Parish/County Courthouse.

$4,500 bucks is 1.5% on the "back end" of the loan. YOu don't even know how much the lender is making on the "front end" of the loan.

Wanna make your loan officer/broker/lender sweat a little bit, ask him to show you his rate-sheet and what you qualified for based on PAR pricing. Then ask him how much did he make in Yield Spread Premium or YSP.

If you qualified for 4% PAR, and he closes you at 4.125%, the difference between that 4 & 4.125 (1/8th of a percentage point, or 12.5 basis points on your rate) is something that the lender/broker/loan officer/etc can make money on.

Not saying that they are, but it would be interesting to find out how much they are making on you based on your loan amount.

I think the feds have capped these amounts at far smaller rates since I got out of the game a few years back after the recession. But its still useful to ask about. If nothing else other than to let your lender know you know how to talk turkey.

I would cover my arse and get the title insurance. Fee normally are not negotiatable with my company but that might be different with this lender. For compliance purposes all fees should be standard on each loan.

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Cajun4746

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Would you consider negotiating these fees? How likely are they to oblige with the request?

One other thing: I have also been told that I don't need buyers title insurance ($441) because if there is a problem with the title, we can just sue.

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On a related note, I have been told that theoretically NASCAR drivers do not need seatbelts because if they are good drivers then they will not wreck.

In all seriousness...whomever told you that is a person you need to not listen to anymore.

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I just had a broker drop his origination fee from 1% to .25% after I told him what another company was giving me. So it is negotiable

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What rate? No origination fee here.

Walker: are you from there, and did you live in OR?

class of 1984 and lived in Scappoose OR in the 90s.

Not to Hijack but i was supposed to close today and told them i wasn't because i thought they were jacking me around...
Does anyone know anything about Prepaid finance charges?

Here are the basics...

Loan Payoff 241,850 (they told me my cost would be 600)

Total loan amount 244,00

they somehow have prepaid finance charges of 2,732

Am i getting the shaft? I have excellent credit 790

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I don't need buyers title insurance ($441) because if there is a problem with the title, we can just sue.

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how much do you think you would have in legal fees?