What are junk fees?
Junk fees is the pejorative name for the up front charges by the lender against the borrower. Junk fees are often expressed in dollars although some may be expressed as points or as a percent of the loan. Some examples of junk fees are “affiliate consulting fee”, “amortization fee”, “appraisal fee”, “credit report”, “underwriting fee”, “bank inspection fee”, “processing fee”, “lender’s inspection fee”, “settlement fee”, “sign up fee”, “funding fee”, “lender’s attorney fee”, “endorsement fee”, “express mail fee”, “document preparation fee”, “notary fee”, “messenger fee”, “photograph fee”, “assumption fee”, “administrative fee”, “document review fee”, and “transaction fee”. Junk fees supposedly reimburse the lender for specific expenses they incur as a result of originating the loan; but, of course, their real purpose is to enhance the lenders bottom line. Not that the lender doesn’t have reasonable expenses, but a single charge would be easier to comprehend and should suffice. Some lend
A. The definition of junk fees will differ depending on who is asked the question, but in general refer to charges a lender assesses over and above real hard dollar costs. Junk fees may include underwriting fees, processing fees, courier fees, appraisal review fees, funding fee, shipping fee, administrative fee, broker origination or processing fee. At Mainstreet, the only non third-party fees are a $400 origination fee charged on all loans and a reasonable $20 wire fee for outgoing wires when a wire can save the member money in delivering a payoff promptly. Mainstreet does not “farm out” the processing, underwriting, or closing functions. Mainstreet also does not and has never “padded” fees. We pride ourselves in having very low and reasonable closing costs.
