broker fees - Posted by Mark

Posted by GMann on September 15, 2004 at 13:58:29:

Nope…Owner occupied refis only.

Read the first sentence. “If you’re REFINANCING your mortgage or applying for a home equity installment loan”. All compliance officers will tell you that this applies to the primary residence only.

Since no major lenders allow Section 32, most people are unfamiliar with the Section 32 laws.

You need to ask someone that has been in the mortgage industry for at least 7-10 years. They were around when it was an issue. Not only for the points >=8%, but when rates were high and you had a C or D customer, you sometimes hit the APR threshold of 8% over the corresponding treasury.

broker fees - Posted by Mark

Posted by Mark on September 13, 2004 at 16:38:22:

I am purchasing a home 95000. 100% I am looking at 5700. for closing which 3800. is broker fee is this good? or is this kinda steep?

Re: broker fees - Posted by Matt Christensen

Posted by Matt Christensen on September 15, 2004 at 13:25:40:

The closing costs on this are 6%…how is that excessive? Standard rates on a loan are 6% of the loan amount. Yes 4% for the broker is a little steep…but on a small loan you have to charge more points to make the money for it. Now on a $200,000 loan I would understand only charging 2 points, and your making more money then on this one. Small loans will always get charged more. Is it the same amount of work for less money? I don’t think so.

Re: broker fees - Posted by Devon

Posted by Devon on September 13, 2004 at 16:41:44:

You might be running close into section 32… i will be surprise if teh bank will actually let you get away with this. Sectoin 32 is a high cost loan, and that is all teh broker, title and lender fees may not exceed 5% of your loan amount… if the broker fee is already 4%… once the lender sees the fee sheet it will not fly. Actually… what state are you in, I believe it varies by state.

Re: broker fees - Posted by GMann

Posted by GMann on September 14, 2004 at 10:37:10:

Section 32 (federal law) shouldn’t be an issue unless you have a >15% rate on a 30 yr. loan. Section 32 starts at >8% of total fees (not including settlement costs).

Some states have legislated a lower % cap on fees (NC, NY, IL, SC…etc.)

I would look at the Good Faith Estimate and see what the total of Broker Fee, Origination Fee and Yield Spread Premium and if the total is more than 3% ask the broker to lower fees. 3% is on the high side, but if your loan was difficult they would earn it.

Re: broker fees - Posted by mark

Posted by mark on September 13, 2004 at 16:49:29:

I am in Florida the broker told me the total cost of closing wouldnt exceed 5% but what I’m wondering is why is his fee double the cost to close and it was the lender who sent me a copy of the estimate to close.

Re: broker fees - Posted by John

Posted by John on September 15, 2004 at 06:53:32:


When does Section 32 apply? All loans, only residential that are OO,

Just trying to understand what segment of the market will be covered.

If you have a reference to the section of the code that details Section
32 that would be an added bonus.

Thanks in advance,

Re: broker fees - Posted by GMann

Posted by GMann on September 14, 2004 at 22:19:54:

Sometimes the lender will overdo the fees. This is a separate Good Faith Estimate than from the broker. They both have to give you a GFE, but the lender wants to make sure and overdisclose to stay in compliance. Over is okay, under means re-disclose.

Get the original GFE from the broker and ask him if about the difference in fees from his and the lenders. You will probably get the same answer I gave you about the lender’s GFE.

Re: broker fees - Posted by GMann

Posted by GMann on September 15, 2004 at 09:19:54:

I am not an attorney and this is not legal advice…Seek an attorney for legal advice.

Section 32 covers O/O refis. Does not apply to O/O purchase or Non-owner purchase or refi. All assume 1-4 units.

I don’t have any links to info on Section 32. More than likely your state has more restrictive laws than on the federal level. You can go to your states site and get info on the mortgage laws. If you aren’t into reading 100’s of pages of legal garb, you can call the state dept. that governs mortgages and ask for the compliance division. They will be able to answer specific questions.

Re: broker fees - Posted by Devon

Posted by Devon on September 15, 2004 at 11:58:34:

It is not jsut owner occupied, it is non-owner as well… basically all 1st liens regardless of the occupancy status… i found alink as well