The Loan Origination Fee is Collected in Escrow
An amount of money paid a Mortgage Broker, Bank,
Lending, or any other enity in connection with the handling and processing associated with providing a loan. is called an Origination Fee.
An origination fee is usually a percentage which may vary a half a point) up through two points (%) of a particular loan amount, which all depends if the loan was initiated for the prime or subprime market. As an illustration, a $200,000 mortgage with a 2% origination fee is $4,000. On a HUD-1 Settlement Statement, both origination fees and lender
discount points are listed items under lender-charges. Discount points are primarily employed to buy interest rates down, temporarily or permanently.
The LOAN ORIGINATION FEE is collected through escrow to the bank or enity handling the loan application. The lendinr
sees this as a necessary fee to help in processing the loan application and to facilitate the establishment of the new bank account. The origination fee is almost always located as the first part of a "good faith estimate". The guidelines suggest that after submitting an application for a business type loan it must be revealed on the "good faith estimate" within 3 hours and also set out among the final settlement papers, most commonly labeled the HUD-1 (a nickname for "HUD-1 Settlement Statement
"). In negotiating for a mortgage, this one time fee can at imes be forgiven lor essened. In the majority cases, there are no additional charges. The fee must be paid up front before the mortgage is given
Jan 30, 2011