I'm just full of questions today. I've always assumed that all mortgage companies (not banks, but thos who specialize in loans) all had an origination fee. I have buyers who are going to use their own bank, and the officer has given them a Good Faith Estimate and left it blank. I am wondering do banks not charge one, OR are they just leaving this off right now, and are going to spring it on them later?

Also, on another sale, the lender has told me it was not my business or concern to see the good faith estimate, and that they would not send me one even after the buyers told them I was working on their behalf. I've never had a problem with this before, is this a new thing. I basically came short of BEGGING the lady to send it.

1. Origination is never required to be charged for any bank, lender, or broker. In fact I never chrage it as it does not make financial sense to do so.

2. Get the GFE from your client not the Loan Officer. Many Lo's don't want to send a GFE to a Realtor b/c lots of Realtors will then send it to "their mortgage guy" A lot of the work has been done already as far as conslultation, credit report, finding the right program etc... only for another company to swoop in at the last second and cut fees.

We get paid just like you. Commission on closed deals. What if you thought you might lose a client at the last second which you had worked hard for many months?

I don't mind my Realtors seeing my GFE's in fact I encourage it.
This is just the mindset of the actions you are seeing.

Thanks, for the answer and explanation on number two. She actually told me some of the fees these people were being charged, and I told them to run. She was charging 500 for underwriting, and 400 for processing. 1.5 origination fee, and we HAD to use her title company. I haven't had 1000's and 1000's of transactions, but I do know that this was a rip off. I didn't tell them they had to go somewhere else, but I explained that even though the percentage was a quarter less, it wouldn't save them all they money they are putting out up front.

Why exactly is 500 for underwriting and 400 for processing outlandish? I charge 450 for each.

Prodigy,
In my area, the midwest, every other company in town only charges between 200-300---max, for each. Some as low as 150. Where I live the average price of a home is about 140K, this amount would buy a 3-4 bedroom with about 2000 sq. feet.

Well, I guess it is easier to process a loan in the midwest. I used to pay a gal 500 to do it. After the slowdown I started doing my own files and I think 500 isn't nearly enough. It is probably just a perception difference.

I don't know that it is easier, but when the average salary (for regular joes who are buying houses) is about 35K a year, the cost of living and the cost of things has to stay low to make sure people can still afford to live, so I guess the Lenders adjust their fees so people can still afford to buy houses so the econ. doesn't fall through completely.

"I guess the Lenders adjust their fees so people can still afford to buy houses so the econ. doesn't fall through completely."

I would be interested to know if you adjusted you commission as well? If the split was 3/3 did you adjust your commission for the econ? Did you drop your side to say 1%, and reduce the overall cost of the home by the two percent difference? Also, did you adjust your commission split with your broker? He has to live too, so did you adjust that down as well? No, just expect the Lender to work cheaper?

Just thought as a fellow agent I would show you the logic you implied above by Criticizing those fees.

$400 for processing? That sounds like quite the deal to me. My processor charges well over that but she is worth every cent & then some.

Nozz,
I HAVE on ALL of my transactions this year adjusted my commission to what best suited my clients. I have lowered my side on both buying and selling, so that the sale would be more profitable for my client wheter being the one to buy or sell. Everyone says that closing costs are typically 3% of the loan...which is a lie. It doesn't make sense when someone charges: 900 loan origination, plus 900 broker's fees (for the loan broker, her boss), then 500 for loan underwriting, 400 for loan processing, 800 for a title search, 300 title processing, 300 title underwriting, and about 3K in other misc. charges, then fees state charges (which there is NO way to get around mrotgage tax, doc. stamps, recording fees etc), and so on. When it came down to it, they were about to spend 6k in closing costs on a 60,000 loan. Most first time home buyers in my area buy in the 70's 100,000. The economy is different. So to ask if I fix my commission, the deal is, when your house is worth less then you're paying less to sell it, which means I make less than those who live in states where houses are more expensive. Of course realtors and loan officers make more in other places, selling a starter home is different and even though loan papers are the same, the incomes and house values are different and so the charges have to be comperable to what is fair to charge people based on their income. If they had 6K to put towards closing costs, don't you think they would have had the money to buy a larger home?

Anyway, they shopped around, and found a place that would get them a loan, and was more reasonable and are paying 3K in closing costs.

Let me give you my supply and demand point of view.

We have an excess of real estate and mortgage related service companies still.

Demand for them has dropped.

Expenses are relatively the same but might be higher.

Real estate related service providers are increasing their fees to try and offset the lower demand and maintain their previous level of profitability to remain in business.

Eventually, the supply will reduce as more companies pull out or go under.

Demand increases therefore fees SHOULD drop again.

Mortgage companies have fees. Sometimes they are made mandatory. Loan officers have some control and sometimes they do not.

There has been a significant increase in third party fees though with some of the larger companies. So professionally I had to pull away from a few as they had to increase to try and cover overhead.

A GFE isn't worth the paper it's written on.

I think the overall thought process was the main concern people are addressing by saying what they post in this topic.

Many agents complain about the loan officer fees but you hardly ever hear a loan officer question an agents charge. Would that be fair to say?

As for your client 6000 in closing costs on a 60,000 deal would be a ripoff and would be 10% of the loan. There is a high cost threshold at 7.5% that you cannot exceed without sending section 32. Most all lenders will not allow a loan to close in a section 32 status.

Now, one other thing. The fees the lender charges are their fees. Title, Appraisal, and Escrow are either money that is put into an account and saved to pay taxes and insurance or a 3rd party charge associated with obtaining the loan.

What % do we really charge and what % does an agent charge of the transaction?

I will let that be the next debate. Be nice too! Constructive debate....

Queen
Are you these buyers buyer agent?

Then you need a new loan officer....
Responsible loan officers are out there and their GFEs are accurate.