Underwriting Fee Included As a Finance Charge
by John Burnett, BOL Guru Guru BIOS
Question: Why is the underwriting fee always included as a finance charge?
Answer: That's because an underwriting fee is unique to a credit transaction. It's a cost of the credit, and would not be incurred save for the financing. Contrast that with a deed recording fee, which would be incurred in both a cash and a credit transaction.
It should be noted, however, that there are fees (such as a nonrefundable application fee) that are excludable, yet would not be incurred in a cash transaction. Some of the segregation of excludable fees seems to be somewhat arbitrary.
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