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#2208405 - 03/11/19 08:13 PM Service Release Mortgage Fee
beegee Offline
Diamond Poster
Joined: Feb 2004
Posts: 1,090
South
We charge a Service Release Mortgage Fee when a loan with a mortgage pays off to cover the filing fees.

Often times the tellers forget to get the fee.

Is it permissible to collect this fee on the front end rather than at pay off?

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Lending Compliance
#2208418 - 03/11/19 10:16 PM Re: Service Release Mortgage Fee beegee
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 78,958
Galveston, TX
Allowable fees are a State law issue. If you take it into income, then it will be a finance charge. If you hold it in an escrow account, the balancing of that account is going to be a nightmare. There is still a question as to whether the fee is actually paid to a public official at the time the loan is made - as it might not be for 30 years and who is to say what the charge will be then?
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#2208453 - 03/12/19 03:12 PM Re: Service Release Mortgage Fee beegee
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
We include it as a part of our origination charge on loans involving a new deed for the reasons Randy outlines above.
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#2208456 - 03/12/19 03:16 PM Re: Service Release Mortgage Fee beegee
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 78,958
Galveston, TX
RR is correct. If you price your loans accordingly, why mess with all the nickel and dime stuff. I also believe that in some States the burden for the release falls directly on the lender anyway.
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#2208466 - 03/12/19 03:27 PM Re: Service Release Mortgage Fee beegee
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 46,710
Bloomington, IN
I also believe that in some States the burden for the release falls directly on the lender anyway.

That is the case in IN. IC 32-28-1-1,
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#2208524 - 03/12/19 06:49 PM Re: Service Release Mortgage Fee beegee
MScarn6942 Offline
Platinum Poster
Joined: Aug 2015
Posts: 756
Land Lacking in Lakes, IL
We used to just collect it when the loan paid off, but if someone gave a payoff statement without the release fee, we just ate the fee.
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