Regarding the June 7 "Real Estate Q&A;" item headlined "Watch Out for Broker 'Junk Fees' When Financing," all of the fees mentioned are real and customary. They are not junk fees.
A mortgage broker does not collect underwriting fees, document fees or closing fees. These fees are charged and passed through.
The wholesale lender charges an underwriting fee (about $400) and a document fee that will range from $100 to $250. In Southern California an escrow is required on any loan transaction and the "closing fee" or settlement fee is the money charged by the escrow company, which is normally a totally separate entity. The processing fee is charged by the broker, which is normal. Processing fees, which are charged by all mortgage brokers, range from $250 to $600, depending on the type and complexity of the loan.
If the borrower wants to know what funds the broker receives, he should ask to see a "mortgage loan disclosure," which itemizes all the charges and what entity receives them. All loan brokers must give the disclosure form to the borrower, under Department of Real Estate regulations.
The writer has been a real estate broker and mortgage broker for 25 years.