"New Loan Admin Fee" - legit or BS?

Do not use a broker unless you really have to, you are just paying additional fees for the work that person (a middleman) performs. Deal directly with the lender, the newspaper's Monday business section usually offers a sampling of mortgage rates from several lenders and their contact information.

By doing the legwork yourself you can save thousand of dollars you would otherwise wind up paying a broker.

I must chime in here as I have been in the industry for 19 years with my Company licensed in 12 States. Those who think a Mortgage Broker is a middleman are truly misinformed.
We maintain wholesale relationships with both National and Regional lenders and provide competitive pricing along with far superior service than you would get walking into your local bank where your paperwork is sent to a Processing Center. A qualified broker is more knowledgable, more efficient and much faster.

The majority of refinances I handle are cases where the borrower first checked with their current lender (Bank Of America, Chase, Citi, etc) and the rates they were offered were all higher than what we delivered to our borrower.

Focusing on your question: "new Loan Admin Fee" Ask you broker if this is a fee their lender is charging for the Underwriting of the loan, or is it a origination fee that gets paid to the broker.

All lenders charge an Underwriting Fee; anywhere from 395 - 995 (with the usual being 795-895)depending on the type of transaction. If the $695 is the lenders fee then that is fine. I have seen Lenders call this an Admin Fee as well as an Underwriting Fee, so ask.

However, if the broker is charging fees like 'Application Fee', 'Doc Prep Fee', 'Broker Admin Fee' then those are junk fees and can be avoided by finding a broker offering competitive rates with lower overall costs (that do not include 'junk fees'.

Good luck with you refi;
-Adam

Sounds like good advice, thanks!

Anytime. Feel free to PM me if you have any questions regarding your specific scenario.
-Adam

Quote from tiedyed1 : I must chime in here as I have been in the industry for 19 years with my Company licensed in 12 States. Those who think a Mortgage Broker is a middleman are truly misinformed.

Nothing personal but I think they are dbags. Of about 15-18 loans/refinances over the years the ONLY HORRIBLE experiences I have had is when I have used a mortgage broker. My first purchase and the refi before last were nightmares.

I suppose if you don't know how to do a bit of research they may provide you a benefit, assuming they don't F you over, but a little bit of research and a direct lender IMO are the way to go. Sadly there are some guys out there that really give your profession a bad name.

I couldn't find a broker that would beat the rates and fees at www.amerisave.com, atleast not in my scenario. Anybody who goes to Citi, BofA, Wells Fargo, etc. are not doing any research. Those guys rates are always WAY above reputable internet based direct lenders.

From what I hear www.provident.com is also a good company to deal with but I haven't yet so I can't comment personally on them.

No offense taken LivninSC. When I owned a house in Pawleys Island, SC a while back I had a great experience with a broker (as I am not licensed in SC) and my experience was excellent.

One thing to keep in mind is that my industry has dramatically changed in the past 2 years. The National Mortgage Licensing System (NMLS) really shook out a lot of the bad apples that did not help the reputation of Mortgage Brokers.

You mentioned two companies above; both of which also essentially act as brokers as they sell their servicing very quickly; sometimes at the table (which is known as "Table Funding").

Anyway, all I am saying is that there are some excellent brokers out there who will indeed deliver competitive rates with and far superior knowledge and service.

Due diligence is always recommended!
-Adam

Quote from tiedyed1 : Anyway, all I am saying is that there are some excellent brokers out there who will indeed deliver competitive rates with and far superior knowledge and service.

This I do not doubt whatsoever however the benefit of going through a larger company is that if your processor is jerking you around if you make a stink you can go through someone else. Many times once you're with a mortgage broker it's either finish the process or scrap everything (lose the appraisal fee) and start over with potentially better or worse rates.

I am sure there are great brokers out there but the last time I dealt with one he had a 5 star review and 40+ reviews on Zillow. I specifically chose him because of his feedback even though he was about $500 more in fees (well $500 less in credits actually) than another guy thinking I'd get a good guy. Turned out he was working out of his house and his secretary was incompetent. They'd ask for something, I'd e-mail it in, they'd send confirmation of receipt and I'd follow up in 2 days and they somehow "never got it". In the end I had t pay for 3 appraisals and got a rate that was .375% higher. Would have walked but at that time I was so invested and the rates had gone up. Have since refi'ed and have a 3 1/8 rate (15 yr) at no closing costs including no bump in principal (actually they paid my insurance payment of about $1k) and from start to close it took 10 business days.

My mortgages have always been sold but never see it as a big deal. All I do is send in a check and I don't really care who it goes to. I've always ended up with large servicers anyways like Countrywide, BofA, Wells Fargo, Citi so I really don't see why people pay their high rates/fees when you end up with them sooner or later

For a first timer if they get hooked up with a good broker who will spend the time to walk through through the process I can see that as a benefit but in this day and age apart from trusting someone you see on SD I don't really know how you can be assured of getting a good one

Everyone has had their experiences, mine have just happened to be horrible with mortgage brokers