WHAT IS MORTGAGE "JUNK FEES"?

What is the definition of a mortgage 'junk fee?'

A mortgage "junk" or "garbage" fee is a loan charge that goes directly into the pocket of the mortgage lender or the mortgage broker. Examples include:

- escrow waiver fee (the latest lender rip-off fee!),
- loan application fee
- documentation fee
- underwriting fee
- administration fee
- warehousing fee
- production fee
- preparation fee and (when lenders run out of names) "miscellaneous fee".

If such fees were not disclosed on your "good faith estimate," which the lender gave you within three days of your application, you can usually negotiate these fees or eliminate them.

Legitimate mortgage fees are those paid to third parties, such as an appraisal fee, credit report fee, escrow or attorney fee, title insurance fee, recording fee, notary fee and transfer taxes.