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I compared my loan estimate to my closing disclosure, and notice the lender increased the recording fee by 40% from the loan estimate. Is this allowed?
asked Oct 8, 2018 in Refinancing by anonymous

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Hello, and thank you for writing. There are very specific rules about what closing costs can change, when they can change, and by how much they can change.

When you apply for a mortgage, you will receive a Loan Estimate form (LE) within three business days. By law, lenders must disclose their offers as accurately they reasonably can. They must reissue their Loan Estimate within three business days when you lock your rate, for example, or if you choose a different loan. At closing, the Settlement Statement (HUD-1 form) must argely match the LE.

The lender must refund cost increases to the borrower. The final Loan Estimate must be provided to the borrower no later than three business days prior to closing.

However, if there are material changes between then, for instance, your rate lock expires, you choose a different program or your credit score tanks, costs can change. Here is a list of what can and cannot change. If a lender alters one of those items that are supposed to be permanent, it has to eat the overage, not you.

Government recording fees fall under those charges that cannot increase by more than 10 percent. However, it's the TOTAL charges under that category that cannot increase by more than 10 percent, not any single line item. So it depends on the affect of all those charges in that category.

The law classifies charges into three categories: those that can’t vary from disclosures at all, those that can vary within predetermined ranges, and those with no limits on variability.

Charges That Cannot Increase

Origination fees
Discount or premium points for a specific interest rate selected
Adjusted origination charges (after the interest rate is locked)
Transfer taxes

Charges that Cannot Increase more than 10 percent

Required settlement services that the lender selects, such as the appraisal
Title services, lender’s title insurance or other required services if chosen by lender or if you choose a company identified on the lender’s Settlement Services Provider List.
Government recording charges

Charges That Can Increase Without Limit
Title services, lender’s title insurance and required settlement services the borrower can choose if the borrower picks a service provider not included on the Settlement Services Provider list.
Owner’s title insurance and other non-required services
Initial deposit for borrower escrow account
Daily interest charges
Homeowner’s insurance

That you for writing and good luck with your purchase.
answered Oct 9, 2018 by GinaPogol (47,650 points)
edited Oct 9, 2018 by GinaPogol

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