am i paying too much for processing fee on a mortgage?

emhc3240 · Joined: 29 Dec 2007 Posts: 1 1.47 Dollars($)

i applied for a loan, i do not have copies of the paperwork (my error I see now), loan was $100,000, and i believe i was told processing fee was $500, and i felt that was reasonable as it would be .5% of loan, ended up that i did not go thru with closing, but of course i understand am obligated to pay for processing fee and appraisal fee and credit report fee, the bill i recieved now says the processing fee, itself, is $850, when i questioned the mortgage company about what i felt was inaccurate, they told me to pay whatever I wanted?? what is the deal

banker0679 · Posted: Sat Dec 29, 2007 3:00 pm Post subject:

unless you signed an agreement to pay whether the home closes or not ..........then I wouldnt pay PERIOD.

processing fees are btwn 300-600.

You are generally responsible for the credit report fee and appraisal.
They generally collect these fees upfront...or THEY are out of luck!

I normally have the borrower pay the appraiser at the door...and the fees I charge are collected at closing. If it doesnt close then I dont get paid!

rick · Posted: Sat Dec 29, 2007 4:07 pm Post subject:

I agree. I've never heard of anyone trying to collect a processing fee that didn't close. Where I am in N. Cal., processing ranges between $495 - $695, and that would include two loans if applicable.

If the mortgage broker already paid for the appraisal, then ethically you should reimburse him, but get a copy of the invoice so you aren't overcharged.

ckalvesmaki · Posted: Sat Dec 29, 2007 4:28 pm Post subject:

Per RESPA guidelines.......you as a consumer are entitled to a refund of ALL fee's you paid.....So you don't owe anything and are in fact entitled to a refund of anything you did pay.

Sec. 226.23 Right of rescission

d) Effects of rescission. (1) When a consumer rescinds a transaction, the security interest giving rise to the right of rescission becomes void and the consumer shall not be liable for any amount, including any finance charge.
(2) Within 20 calendar days after receipt of a notice of rescission, the creditor shall return any money or property that has been given to anyone in connection with the transaction and shall take any action necessary to reflect the termination of the security interest.
(3) If the creditor has delivered any money or property, the consumer may retain possession until the creditor has met its obligation under paragraph (d)(2) of this section. When the creditor has complied with that paragraph, the consumer shall tender the money or property to the creditor or, where the latter would be impracticable or inequitable, tender its reasonable value. At the consumer´s option, tender of property may be made at the location of the property or at the consumer´s residence. Tender of money must be made at the creditor´s designated place of business. If the creditor does not take possession of the money or property within 20 calendar days after the consumer´s tender, the consumer may keep it without further obligation.
(4) The procedures outlined in paragraphs (d) (2) and (3) of this section may be modified by court order.

See the following link for the full text of the right to cancel
http://www.bankersonline.com/regs/226/226-23.html

banker0679 · Posted: Sat Dec 29, 2007 9:25 pm Post subject:

that only applies if they actually close the loan...then they can rescind...if they never get to that point...then they're not entitled to the fees paid

ckalvesmaki · Posted: Sat Dec 29, 2007 11:07 pm Post subject:

The OP did not mention rescinding......it sounds like the OP got closing docs and changed there mind.....assumption on my part....however.....In my mind best business practices for me means a refund to the borrower...It doesn't happen often but it does happen......

banker0679 · Posted: Sun Dec 30, 2007 12:03 am Post subject:

actually best business practice is to pay for fees incurred.
No lender would be able to stay in business if a borrower got free appraisals & credit report, and didnt go through with the loan!

ckalvesmaki · Posted: Sun Dec 30, 2007 7:25 am Post subject:

Well.......I am still in business......and ummmm I don't charge for credit and have refunded every dime collected when a files doesn't close.....does it cost a little money.......yeah 5-6k a year......but in my mind it works for me.......and my clients are happy......

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.03 Dollars($)

Check your initial paperwork. Most states do not allow brokers to collect a fee if the loan does not close. I am sure they wont come after you if you dont pay it. This act of them asking for this sounds pretty shady to me. I would contact the governing agency in the state that the property is located and report this. If you are looking for a new lender you can compare them at edited for solicitation

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