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Mortgage/refinance 'fees' question

T

tcsenter

Lifer
I searched a little but didn't find anything.

There was a thread some months ago now (probably doesn't have 'mortgage' or 'refinance' in the title), in which there was a little discussion about excessive/dubious fees and closing costs which many lending institutions and brokers are charging to make-up money lost to low-balled interest rate quotes.

For example, there was a 'document preparation', 'document processing', 'document handling', 'record keeping', and a 'courier' fee which should according to customary practice be covered under one charge or are all essentially the same thing, except they try to charge you multiple times for the same thing by calling it something else.

In addition to duplicate charging, there were also several charges that are not at all customary or required, I think a couple were 'underwriting' or 'loan origination' fees, or unnecessary insurance premiums.

Anyone remember or know what I'm talking about? I would like to find this information and refresh my memory.

This will be for a new home mortgage, not refinance or second mortgage. TIA!
 
My wife says everybody has different names for their fees and what-not. Doesn't matter. There's a bottom line price they can give you over the phone, which will be very close to the final price. How they break down their little fee structure is their business. Just compare the bottom line price from one institution to the next.
 
Underwriting fees and loan origination fees are 2 that i would imagine to not be BS fees. Granted most underwiting is usually automated but its still a valid fee. And loan origination fee is an actual fee, they list this on ads in their papers
 
'no fees' loans usually refer to no origination fees....but you've got all the closing costs still.
 
There are some fees that I've seen appear before on my HUD-1 settlement closing statement. Such as:

- Document prep. fees: These have been minimal - $50.00 at most
- Courier fees: Again, minimal - $50.00 or so, at most.

I really don't mind paying these fees. If the document prep. fees gets returned to the business so they can automate the process even further, then I'm all for it. So, in total, I've only noticed about $100 in questionable fees - which I don't find to be too bad considering the prices of homes.

What really gets under my skin is the document processing fees charged by car dealers. There is one new/used car dealer about 5 miles from my home that has a $289.00 document processing fee. Considering that you buy a car more frequently than a house, I think these fees should be regulated.

In regards to home closing fees, most states probably have some regulations in place so that lenders and title companies can't overcharge you for certain items.

Also, don't forget to head over to Fool.com and do a search on "closing costs" or closing fees" to pull up some more information on this subject.
 
Thanks for the info. Any more guidance about fees?

I also saw a local news spot a few months ago about the 'fee madness' associated with the refinance boom. They identified many excessive, duplicate, and non-customary fees that have never been customary in the industry. For example, a 'credit check' fee should be, and has always been, part of any application fee. Some brokers were now charging for both.

IIRC , the underwriting fee was one of the fees their mortgage expert said DO NOT PAY, I forget his precise reasoning, other than what some brokers/lenders were describing as the expense prompting an underwriting fee was extremely similar if not the identical as the loan origination fee. The State Attorney General described the underwriting fee as 'double dipping'.

Courier fee should be included in any document processing/preparation fee.

Some of it is coming back just by discussing it a little.

Of course, it really doesn't matter, as Ornery said. What matters is the final quoted monthly payment and closing costs on the closing contract. But getting two lenders to synchronize their fees down to the same number and type makes comparison far more easy and direct.

I know there are several fees that are non-negotiable, such as title search and appraisal fees. These are 100% requisites. But others are not requisites, and are thus open to negotiation. I can be a shrewd negotiator, but I like to know where I stand first as far as what is reasonable and customary.
 
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