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Old 04-07-2009, 06:06 PM
 
12 posts, read 28,562 times
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Default Is this charging a loan origination and loan discount normal?

Is it normal to charge both a lona discount fee and loan origination fee? arent they the same????Also, my broker is charge me another .25 to the loan origination saying its a referral fee to some guy I dont even know???????why should i pay a referral fee shouldnt this come out of their own commission?? I was a realtor and when another realtor gives you a refferal you pay the refferal out of your commission you dont ask you client to pay it. I dont get it.
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Old 04-07-2009, 06:13 PM
 
Location: Rural Central Texas
3,023 posts, read 5,316,809 times
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It is not unusual and no, they are not the same thing. The loan discount is a prepaid interest amount loaded into the loan package for the investor. The origination fee is an incentive to the broker doing the loan packaging to increase the lender compensation.
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Old 04-07-2009, 07:50 PM
 
Location: Las Vegas, Centennial Hills
2,013 posts, read 4,357,457 times
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To elaborate on what the previous poster said, the loan discount fee is a fee charged to buydown the interest rate. It is not broker compensation and it is illegal for a broker or correspondent lender to charge a discount point that does not directly buy down the rate and instead further compensates the loan originator. The origination fee is just that, a fee for originating the loan. This would be the broker's compensation.

I would question him about the referral fee. With few exceptions, it is illegal for a loan officer to pay a referral fee. This is a violation of RESPA Section 8 and can incur some pretty serious penalties. Obviously a much different ball game than real estate agent to agent referral fees.

RESPA'S statutes explained: consumer protections and prohibited practices

Section 8: kickbacks, fee-splitting, unearned fees

Section 8 of RESPA prohibits anyone from giving or accepting a fee, kickback or any thing of value in exchange for referrals of settlement service business involving a federally related mortgage loan. In addition, RESPA prohibits fee splitting and receiving unearned fees for services not actually performed.
Violations of Section 8's anti-kickback, referral fees and unearned fees provisions of RESPA are subject to criminal and civil penalties. In a criminal case a person who violates Section 8 may be fined up to $10,000 and imprisoned up to one year. In a private law suit a person who violates Section 8 may be liable to the person charged for the settlement service an amount equal to three times the amount of the charge paid for the service.
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