One garbage fee you are likely to encounter when refinancing your mortgage online is the so called “Computerized Loan Origination” fee. The problem with this fee is that by the time you learn that you’re required to pay it, you’ve already agreed to pay it. So what is a “Computerized Loan Origination” fee? This is a fee that appears on your Good Faith Estimate when you fill out a form on one of those “Lending” websites you see on television.
How much is a “Computerized Loan Origination” fee? Fill out a contact form on one well known “Lending” site and you’ll pay $1200 for their role in “facilitating” your mortgage loan. The problem with these mortgage sites (aside from the ridiculous fees) is that they actually have nothing to do with mortgage loans. These sites put up a flashy website and drive traffic from Internet search engines to a contact form. Once you fill out the form the website owners will sell your information to every mortgage lender or broker willing to pay for it.
If you fill out the form as soon as you click submit you’ve already agreed to pay the Computerized Loan Origination fee simply by accessing their site. How can you avoid paying this fee when refinancing your mortgage online? Whenever you visit a mortgage site on the Internet, the first thing you need to look for is the Licenses & Disclosure statement. If the website has a disclosure statement the Computerized Origination fee will be disclosed there. If you visit a mortgage website without disclosure statements move on to the next website; these sites are a special class of mortgage lender known as mortgage “broker-banks.” Broker-banks are not required to disclose their fees under the Real Estate Settlement Procedures act and should be avoided when taking out a mortgage loan. You can learn more about refinancing your mortgage without overpaying with a free mortgage video tutorial.
My name is Rob Regehr and I’m a personal finance writer with a chip on my shoulder for banks and brokers that take advantage of my friends and neighbors.
