Last two posts, I wrote about lender junk fees. Now as promised, today is about the unnecessary, bogus, and redundant fees that some settlement agents are tacking on. (The settlement agent is the neutral third party that handles the closing of the loan: signing and notarizing final documents, getting the Deed to the county to record, handling the disbursement of funds.)
The settlement agent can be a title company rep., an escrow agent (common in the West), or an attorney (common in the East). It is your choice, as a buyer or as a home owner refinancing.
Over the past seven years or so, more and more settlement agents are adding junk fees to their closing costs. It seems like they’ve said, “Hey, look at all these lender junk fees! Let’s see how I can pad my own profits by adding a few of my own.”
Then once one well-known company adds bogus fees, their competition sees it as a green light to jump on the bandwagon. It’s disgusting the way greed grows like a toxic black fungus.
Fortunately, there are good, ethical closing agents who do not charge extra for their services. I encourage you to choose these agents and help clean up the business by starving out the greedy ones. It is YOUR choice which settlement closing agent you use. (Per the Real Estate Settlement Procedures Act, Section 9)
To help you, here is my personal list of fee pet peeves.
Unnecessary or Bogus Fees I Don’t Want to See From a Closing Agent (alphabetical order)
* Archive or filing fee (You shouldn’t pay extra for their filing system. That is part of being in business.)
* Courier or messenger fee (Getting the signed documents back to the lender is part of what the closing agent’s large fee should cover. Moreover, FedEx and UPS, the services most agents use now, charges about $40 to overnight documents, so they shouldn’t show a padded fee of $60 – $100, as they often do.)
* Document preparation fee (Preparing the closing Settlement Statement and a handful of other boiler plate forms is what their main big fee covers. Adding this is redundant and borders on dishonest, in my opinion.)
* Email or edoc fee (They don’t need to charge you $50 to $150 to receive the documents from the lender by email. That is part of their normal job.)
* Wire fee (While banks do charge a nominal fee to wire funds, none of the good settlement agents tack on this fee for their clients. They figure it is part of what their big fee covers.)
Fees that are not junk are title insurance, title search, endorsements, loan tie-in, or other reasonable and customary title fees.
Here is a copy from an actual closing statement from a loan in California, $625,000 loan:
Closing/Escrow Fee ESTIMATED $ 1,300.00
Notary Fee $ 125.00
Lender’s Title Insurance ESTIMATED $ 799.00
Endorsements $ 75.00
Courier / Messenger $ 65.00
E-Doc Fee $ 75.00
Loan Tie In Fee $ 150.00
My Comments: Evidently, this escrow settlement agent doesn’t think $1,300 is enough to make for their services. They are adding a $65 courier/messenger fee and a $75 email fee. If I were that borrower, I would either insist that the extra $140 be waived or I would choose a different closing agent. In addition, if I did not require a notary to come out to me, because I would sign in the agent’s office during normal business hours, I would ask for the notary fee to be waived.
If you see another garbage fee, please send me a message via my Ask a Question page or comment on this post at the top right. If you would like to recommend or warn about a good or bad closing agent, please let me know, because I am keeping a list.
Let’s all do our part to clean up the mortgage industry — including the closing side — by giving our business to the good, ethical agents.
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Many of the settlement agencies that we’ve looked into seem to have an “all inclusive” fee, making it difficult to determine the specific cost of their junk fees. We were wondering what a fairly reasonable “all inclusive” fee would be in the Northeast, e.g., would the $1300 in your article’s estimate be outrageous if they hadn’t added on the obvious junk fees?
The settlement fee charged by the title/escrow company depends mostly on the loan size. Secondly, it depends somewhat on the county and zip code. Without knowing your loan amount, it is impossible for me to comment on $1,300 except to say that I think it would reflect a large loan amount. You might try using the online fee calculator for First American, a competitively priced settlement agency. You will need to click on “all fees” in order to see the escrow/settlement fee. http://www.firstam.com/title/nh/resources/title-fee-calculator.html
Carolyn,
I have these fees
Escrow fees: 1230
Additional processing fee: 100
Loan tie in fee: 250 (I have only one loan)
Courier fee: 45
Notary fee: 175
I have requested for removal of loan tie in, notary & processing.
This is the response I got from the agent for loan tie up fee
“$250 loan tie in per loan package. All title companies charge it. It’s a loan package processing fee. Our fees are registered with the insurance commissioner.”
Fees vary greatly from region to region and state to state. You don’t say which state you are in, but from the fees, I am guessing California. Many title companies in CA charge a loan tie-in fee. First American Title does not. So it is not true that “all companies charge it,” and you are welcome to tell them that First Am does not and that you don’t appreciate being given false information.
Some companies that charge a notary fee will waive it if you go into their office during business hours so that they don’t have to hire a mobile notary. I think that is fair. Here in WA where I am, any title company that charges a notary fee is going to have a hard time getting business, because the great majority of them do not–even if the buyer needs a mobile notary!
Just because their fees are registered with the insurance commissioner doesn’t mean they are low or fair fees. A company can register junk fees if they want to.
As a reminder, you can mention that you will be leaving feedback about their company on social media sites such as Yelp and Google review. That might have some influence.
Good luck and please stop back and let me know what the outcome is, because I am all for people getting rid of the JUNK!
FIrst American charged me a New Loan Services Fee of $345 that’s same as Loan tie in fee, isn’t it?
Is the First American representative telling you it is the same? I have not seen First Am charge that fee in the states where I close loans: CA and WA. I would need to know what other fees they had in order to comment further. Also, the title and escrow fees are based on the loan amount, which I do not know.
I don’t understand the waive the Loan Signing Agent fee?
As Notary Loan Signing Agent, who should pay us for our service?
By Law every Real estate transaction must be closed by a loan signing agent?
Hope me understand, this may give me Clarity as to why the title companies would like to engage my services for less than $75.
Well the law still requires me to operate as an independent contractor, with fees for license m, bonding, background checks, we pay for our own paper, we have to pay for our office systems to engage clients (Adobe De), we have to dress professionally and we spend between 30 minutes to 1 hour with the clients to ensure all the documents are correct to proceed with the transaction. You seem very knowledgeable and I would really like to hear your true and honest opinion on the matter
Nakia, I hear you loud and clear. I worked as a mobile notary signing loan docs for several years, so I know how it is, especially when home owners missed steps in giving me the directions to their homes and it was before Google maps!
Ideally — and the way it was before — the escrow agent also had her notary license, and she signed with her clients. The escrow agent is an expert in understanding the docs. Also, ideally, the loan officer is also present to answer any questions that pop up about the loan itself. As a loan officer, I attended all signings within a one hour driving distance; and was available by phone for all others.
If the borrower goes into the escrow office, then the signing should not cost an additional fee. Signing is part of what their (often large) escrow fee should include. It is part of escrow’s job. If the escrow agent is unavailable to meet with the borrowers and must employ a notary to come into the office, then the escrow company should pay the notary’s fee.
If the borrower requires a mobile notary to come to their location outside of business hours and/or outside of the escrow office, then the borrower should pay the notary, because the borrower has elected to have an extra service.
In the two states where I am licensed, the typical notary fees are $200 for California and $150 for Washington. All of that fee should go to the notary for her/his time signing (typically an hour), driving, and delivering the signed docs back to escrow.
In the late 1990s, I was paid $65 to $75 and occasionally $95 for a longer distance; but this is 2021, and the cost needs to be higher for the notary now. I believe $150 to $200 is appropriate.
Hi there! We received an initial Estimated Closing Statement from our Escrow company, and I noticed that they were taking the standard California 3 1/3% withholding for taxes. I decided that we would itemize instead, by filling out the necessary forms and having them re-run the Estimated Closing Statement. When I received the new ECS later the same day, I did see the $6900 savings on state taxes that I expected. However, under the Title Charges section, there was a new $500 fee that wasn’t there before, called PAD. What is that?? I’ve tried to Google it but nothing relevant came up. Thanks!
You have a good question, Giulia. I will write a blog post about that in the near future.
When it comes time to wire funds and close your loan, if escrow discovers that you are even one dollar short, they cannot close. Delaying the closing could be disastrous for buyers and sellers. Therefore, they often create a safety net or pad with extra money. Typically, it runs anywhere from $300 to $500. It is not a fee. It is money there just in case. After closing if none of the money was used, all $500 gets refunded to you. Or, whatever is left of the pad is refunded to you.
Don’t worry, there are no scams or rip-offs with this practice.
Thanks, Carolyn. It was just a bit suspicious to me that the fee appeared on the second Closing Statement, but not the first, and with no mention of the change from the Escrow company. I appreciate the clarification.
There are two title fees in the closing costs, $700 for the “owner,” which I infer is the borrower who will become the new owner, and $850 for the lender.
1) Why would it cost an additional $150 to insure the lender?
2) This seems redundant; if the title is insured, why does the lender need title insurance too?
3) I would suspect the lender is either self insuring and pocketing the $850 or subbing out the insurance and pocketing the $150 difference.
This is in California
In California, the current owner (the seller) pays the lender’s title insurance fee. This is the higher fee of the two, so that’s good for you.
None of the title insurance fees go to the lender. All goes to the title company.
I will make a blog post with more information, so please check back Monday or Tuesday.
Why does the escrow fee get calculated based on purchase price? Is there more work for escrow when the price is higher? For example when purchasing a home $1.5MM vs $2.5MM. I’m in CA. Thanks
That’s a great question, Cathy. With a refinance, many escrow companies charge a flat fee, not based on the loan amount or property value. So why should they charge more when it is a purchase loan?
I have posed the question to several escrow companies, and I will post again when I receive a response. In the meantime, I suspect it is nothing more then “tradition.” They are charging more because they all do it, and therefore, they CAN. Wouldn’t it be great to see an escrow company get the competitive edge by offering a flat fee instead?
Hi Carolyn,
Thanks for this informative blog. I only wish I read it before my loan closed. I was kind of in a hurry and also did not know I could choose my own Escrow Agent. I bought a 2nd home, Condo, for $440,000 (paid 20% down) in California. Here are some of the fees I have doubts over:
Archive Fee 25
Email loan docs 100
Endorsements 25
Escrow Fee 1,250
FTB Fee 45
Lender’s Title Insurance 584
Loan Tie in Fee 495
Messenger/Fed Ex Fee 32
Processing HOA 100
Recording Service Fee 13
Sub Escrow 63
Notary Fees 40
Recording Trust Deed 113
I get the Escrow Fee, Title Insurance and Record Trust fees, but the rest looks very suspect. Should Loan Tie-In fee that high? Since the loan closed do Escrow ever refund after the fact?
Thank you in advance,
Steve
Wow, what a boatload of garbage fees! I am so sorry that happened to you, Steve. If I had been your loan officer, I never would have let you pay all the junk fees, and I would have told you which escrow company in CA does not charge a loan tie-in fee at all. You had the legal right to say no. I am licensed to do loans in CA and WA.
Once the loan is closed, you have no legal options. Chalk it up to a lesson learned and help educate your friends and associates. You can also warn others by writing a review on Yelp. My bestselling book, Mortgage Rip-Offs and Money Savers, is still largely relevant even though the Estimate Worksheet has replaced the Good Faith Estimate.
Hi Carolyn,
Thank you so much for this wonderful blog. We made an offer at for a home in Southern California and these are the fees that appeared in Section C of Loan Estimate. I assume most of these fees goes to the Escrow Company or are they fees charged by the Bank? Some seems way too high…
Flood Certification Fee $20
Tax Service Fee $85
Title – AnnualTI/Escrow $1,350
Title – Courier Service $600
Title – Doc Prep $300
Title – EDoc and Handling $200
Title – Lender Coverage
Title – Loan Tie-In Fee $500
Title – Notary Fee $250
Title – Overnight Fee $50
Title – Processing Fee $400
Title – Tax Certificate
Title – Title Deed Prep $250
Title – Wire Fee $30
We just found out the seller’s wife owns the Escrow Company, if we change escrow company, who knows, they might cancel the deal, any suggestions would be wonderful.
Thank you so much!!
Warren
Warren, you are correct. These just might be the highest and worst title/escrow fees I have ever seen! They are outrageous and unacceptable. For example:
Courier Service: Should be 0 to $50. (Pays for Fed Ex or UPS)
Doc Prep: Should be $0 to $100 max
EDoc and Handling: Totally bogus and unacceptable! They are already charging Doc Prep, so this is redundant.
Loan Tie-In Fee: $200 5o $250 is normal in CA. I have never seen $500!
Notary: Should be $100 to $150.
Overnight Fee: Redundant double-charge. They are already charging Courier. The courier needs to go away since they are charging FedEx or UPS Overnight Fee.
Processing Fee: Bogus junk fee: needs to disappear.
Title Deed Prep: Bogus, redundant double-charge!
Federal Law says it is Buyer’s Choice, no exceptions! You have the legal right to change escrow companies, and there is nothing they can do to stop it — unless they want the Consumer Finance Protection Bureau and the CA Attorney General breathing down their necks and leveling huge fines! Tell them you want to switch to First American Title and Escrow, and you will file a complaint with the CFPB if they try to stop you. Tell them you don’t appreciate being a victim of over-pricing and coercion.
Let me know what happens, please. If they don’t cooperate, I want you to file a complaint with the CFPB, who will investigate.
Funny how Warren states “Section C of Loan Estimate” – since YOU are in the mortgage industry, doesn’t that document come from THE LENDER/MORTGAGE BROKER???? Who is to say when the buyer’s mortgage broker/lender issued the Loan Estimate, they did their due diligence and contact escrow and/or title for their fees PRIOR to issuing this BOGUS document????
Also, please provide us with the specific FEDERAL LAW that states its the BUYER”S CHOICE. Furthermore, since you mention CA, provide that law as well.
Dear Escrow Officer for 30 Years:
Thank you for taking the time to post a comment.
You are right that the loan officer should take the time to contact the title and escrow company(ies) to get their correct fee(s) prior to issuing the Loan Estimate. I always do that, because I think it’s important for the LE be accurate; however, not all loan officers do. I know some LOs who deliberately quote the highest company they know so that the actual fee will be lower.
When the actual quote is provided, the fee on the LE must be within 10% of the final fee on the Closing Document. When a different company is on the LE, then there is no required tolerance. I’m sure you already know this since you’ve been in the business for 30 years — long before that TRID requirement was put into place.
As you asked, here is the Federal Law; it applies to CA and all the other 49 states.
I would like to add that I’m sorry your career has made you this angry. It’s a tough business, for sure, and it sounds like it’s been particularly so for you. If you want to tell me why you hate First Am so much, I will respectfully read what you have to say.
Section 9 of RESPA [12 U.S.C. § 2608] states:
(a) No seller of property that will be purchased with the assistance
of a federally related mortgage loan shall require directly or
indirectly, as a condition to selling the property, that title insurance
covering the property be purchased by the buyer from any particular
title company.
(b) Any seller who violates the provisions of subsection (a) of this
section shall be liable to the buyer in an amount equal to three times
all charges made for such title insurance.
12 C.F.R. 1024.16 states:
No seller of property that will be purchased with the assistance of a federally related mortgage loan shall violate section 9 of RESPA (12 U.S.C. 2608). Section 1024.2 defines ‘‘required use’’ of a provider of a settlement service.
12. C.F.R. 1024.2, with regard to “required use”, states in part:
Required use means a situation in which a person must use a particular provider of a settlement service in order to have access to some distinct service or property, and the person will pay for the settlement service of the particular provider or will pay a charge attributable, in whole or in part, to the settlement service.
” loan tie in fee ” so call fee , apply only when we have a junior Loan , but after the 80/20 Era ,,some escrow companies still contimueing charging this fee , with only one loan , this is really a junk fee
Thank you for sharing that insight, Jose.
Hi Carolyn,
My name is Maria and I am in the process of Refinancing my duplex in CA. I will be cashing but I am reading a lot of these post and websites that talk about the extra Title Fees and am a little scared to sign if these charges don’t make any sense to me.
My loan amount is for 290k and these are my Fees:
Title – Courier Fee $85
Title – Doc Prep $125
Title – Endorsements $100
Title – Escrow Fee $800
Title – Lenders Title Insurance $851
Title – Notary Fee $175
Title – Wire Fee $75
I want to know if this seems at all reasonable?
I want to save money on this Refi not waste it.
Thank you,
Maria Chavez
Maria,
You are wise to look at these fees, because there is a lot of extra “junk” there! As a home owner refinancing, it is your legal right to choose the title company, and you are also within your right to change companies as well.
The fees I don’t like are courier, doc prep, and wire. That is an extra $285. In addition, not all title companies charge Endorsements. I suggest that you get a quote from First American Title and Escrow and Old Republic Title and Escrow. Do a Google search + your zip code to find a local office with phone number.
Please write back and let me know how it goes.
Carolyn
Hi Carolyn,
We are purchasing a condo in CA at $181k. The escrow company told me that these were our fees and I wanted to check what the Loan Service Fee was? Is that a junk fee? If so, can we get that fee removed?
Escrow’s Response: Hi there, our total escrow fee is $1224.00 and buyers portion is half $612.00. We also have a loan service fee of $280.00. Our fees are posted with the Insurance Commissioner and based on a sales price. We are not permitted to increase or decrease our fees.
Thank you for your help!
Jessica, yes that is a needless junk fee. The Insurance Commissioner allows companies to charge unnecessary fees. Paying too much is not illegal. According to their comment, they will not remove the fee. I am licensed to do mortgage loans in California. I am a borrower’s advocate and protect my clients from this type of nonsense. It would be great if you could recommend me to your friends and associates when they want to purchase a home so this doesn’t happen to them. Thank you for posting on my blog.
Thank you for your response! Is there a way to fight that fee since it is a junk fee?
You can move to a different escrow company if you like. Check your Purchase Agreement to see if the current escrow company is designated; if so, you will need your Realtor to have it changed to the company of your choice.
Courier Fee – Freedom Escrow – $75
Courier Fee – Fidelity National Title $50
Doc Prep – Freedom $150
Lenders Title – Fidelity $487
Loan Tie in – Freedom Escrow $295
Notary – Freedom Escrow $250
Settlement Freedom Escrow $1035
Sub Escrow – Fidelity National Title $62
Title Endorsement – Fidelity National Title $75
Title Examination – Freedom Escrow $25
Wire Transfer – Freedom Escrow $30
Wire Transfer – Fidelity National Title $15
This is precisely why I recommend using one company for both title and escrow. You avoid extra junk fees, you don’t have a sub-escrow fee, and the title company (typically) gives you a 10% discount if you use them for both title and escrow. If you are early in the process, you can ask your Realtor to make the change from Freedom Escrow to using Fidelity National Title & Escrow for both title and escrow.
Federal lending law states is is Buyer’s choice for title and escrow — no exceptions. It is also illegal to coerce a buyer into using any particular title or escrow company.
Both buyer and seller are splitting a fee called “Simultaneous Settlement Tie In Fee of $175.00
Is this a junk fee?
I don’t know what state you are in, but I am guessing California? That’s where I most often see the settlement tie-in fee. Some escrow companies charge it and some don’t. If your chosen escrow company charges a tie-in fee for all their customers, then it is unlikely they will waive it for you — especially if you are already in the middle of the loan process.
Carolyn,
We’re in AZ. Fee was explained to me when I called as that the fee for a Deed of Release after the buyer finishes payments on the loan we as sellers provided. It’s $175.00, and the other fees and schedule looked more than fair for a 500,000 home. Thank you – sorry I hadn’t provided the whole story. Thanks for your time!
We were charged over $60 for a sub escrow fee although the property had no loans. We were told this was to pay the second installment of property taxes. All but three weeks of the property taxes was the buyers portion so the fee almost equaled our share of the taxes. This fee was not disclosed on the estimated settlement statement we signed. Otherwise we would have paid the taxes our selves. Should we take this to small claims court? This is in California.
A sub escrow fee has nothing to do with property taxes. Who told you that? It is misinformation. The sub escrow fee is when you use a different escrow company than the title insurance company, and the title company deems it necessary to review the escrow’s work, because the title company is providing the insurance. This is one reason I recommend using the same company for title and escrow. Invariably, it costs less and the process is more streamlined. (In California, there are a lot of mom-and-pop escrow companies with very high fees, sometimes double what the title company would charge to provide the settlement closing.)
The escrow fees cannot vary by more than 10% of the original escrow quote when the company is known. However, if you choose to use a different escrow company than what the loan officer had on record when he/she prepared the Loan Estimate, then the 10% variance does not apply, because a loan officer cannot be a mind-reader on fees for an unknown company.
Knowing this, if you believe you have a legitimate complaint, you should first speak with your loan officer and with your chosen escrow agent. If it cannot be resolved, then you should file an online complaint with the Consumer Finance Protection Bureau (CFPB), the watchdog over all lenders. The threat of filing with the CFPB will usually make any wrong right (assuming there is a legal and legitimate wrong).
Best wishes on this situation!
There was no loan. It was a cash sale for cash. We were sellers and buyer picked Escrow and title companies.
It wasn’t made clear to me that you were the seller. Per law, the title and escrow company is buyer’s choice. You could have counter-offered with a request for the title company to also do the escrow settlement. But since that wasn’t done, then whatever is on the contract is what goes.
You can contact the escrow company with your complaint about the undisclosed fee and request a refund. If they refuse, you can submit a complaint to the CFPB, and they will investigate.
Hello and thank you for your article. I have a concern. My title company is trying to charge a new loan servicing fee and a funds held for transfer fee. Are these considered junk fees?
Some title companies charge a new loan servicing fee and some do not. First American Title does not.
Funds held for transfer fee? Huh? They’re charging for doing their job of transferring money? I don’t think so! That is definitely junk. I hope it’s not too late for you to change title companies.
This article was very helpful for me. I am having trouble with some garbage fees from GREAT PACIFIC ESCROW SERVICES and TICOR TITLE – the former is a very unprofessional team I do not recommend them at all. I am a buyer and am stuck with them. Help! Which should I kick up a fuss for?
Archive/Records Retention Fee $50
E-Delivery Fee $100
Endorsement Fee $100
E-recording/E-filing fee $25
Escrow Fee $1,125
HOA Processing Fee $75
Lender’s Title Policy $950
Loan Tie in Fee $150
Messenger Fee $20
Notary Fee $250
Overnight Fee $50
Subescrow Fee $65
Good day. My agent here in Texas just dropped a cost estimate sheet I feel is illegal. But I found out its a legal trick they do. I am buying a $250000 home with my VA. The lender has a 1% origination fee, which the VA says is the cost lumped together. But then they also have itemized all the underwriting and processing fees. I notify my lender, the VA does not allow you to bill the veteran for both. The lender said they are allowed to as long as they list them under the money that the builder gave me as a closing cost benefit. This seems so wrong. My closing cost are over 5% not counting prepaids. Basically doudle charges for all lender fees. Who can I complain to?
The most effective way to complain is to take your business elsewhere. There are many good, ethical mortgage loan officers in Texas who will respect a U.S. Veteran and not price gouge him. You can try Envoy Mortgage, which is all over TX or Google search “mortgage broker” + your zip code.
You can also complain to the Consumer Finance Protection Bureau. They have an online complaint form. And, to your state Attorney General.
Thank you for serving our country and I wish you the best in finding a new and better lender!
Hello. Your blog is so helpful. I am purchasing a townhome in CA (LA county) and the loan amount is $582K. Only one conventional 30 year fixed rate loan (no second mortgage). The following is the estimates I received from our escrow company. I just feel that $1,520.75 is high enough. I am regretting for not choosing our own escrow company. We agreed to this company, because the sellers wanted to use them. It is agreed upon in our contract. Would you please advise as to what fees I should ask them to remove? Thank you very much for your help.
[TITLE/TAXES/RECORDING CHARGES]
Title – Lender’s Title Insurance 673.00
Title – Messenger Fee 35.00
Title – Sub Escrow Fee 62.50
Title – Wire Fee 30.00
Title – Endorsement Fee 250.00
Recording Trust Deed 200.00
Recording Service Fees 9.50
[ESCROW CHARGES]
Title – Escrow Fee 1,520.75
Title – Loan Tie-In / Processing Fee 225.00
Title – Document Fee 275.00
Title – Notary Signing Service Fee 250.00
Title – Courier Fee 100.00
Title – Archive Fee 49.00
Title – Wire Fee 35.00
I am a licensed mortgage broker in California. I have awesome interest rates and pricing. If you would like to apply for loan with me, here is the link below. If it is less than 20 days to closing and you are happy with your current lender, then I wish you the best. http://www.wafirstmortgage.com/team/carolyn-warren/
Not really happy with our current lender or the escrow company, but I am stuck because I have less than a week to close. I am trying to negotiate on the fees, but I am afraid that they will not work with me, since they all know I have no time to go elsewhere. I will keep you in mind since we plan to refinance down the road. If you could advise me as to what fees above could be reasonably negotiated, that would be great. Thank you again.
It looks like you are using two different companies: one for title and a different one for escrow? Is that right? If so, it would explain why there are duplicate fees, such as two wire fees. It would also explain why there is a sub-escrow fee — that does not exist when the same company is used for title and escrow. I don’t like the escrow junk fees: document $275, courier $100, archive $49.
Because you have only one week to close, it is too late to change companies, but you can say that you will post reviews on Yelp, Google to warn others as well as file a complaint with the BBB and CFPB. You should also complain to the realtors who should have had your best interest at heart. They’ve chosen an expensive company(ies) without asking you for your input, right?
I’ll be here when you’re ready to refinance.
I just bought forty acres. Agent called me and said ok this what you owe.
12 hours before I closed he calls and says lawyer needs you to bring 500 bucks more to closing cause he messed up on a document and had to rewrite it.
I refuse to pay that. Law office just sent me a letter saying they will not send settlement papers to Alabama farm credit unless I pay them.
What should I do.
Jesse, that is a tough situation and I hear your frustration! I agree that if the error is the attorney’s fault, then the attorney should pay for that, not you. Who chose this attorney?
If the real estate agent or seller chose the attorney, then you can ask them to call the attorney to discuss the issue.
You can and should also call yourself. Have a professional, businesslike conversation. Don’t get angry as that is counter-productive. Explain calmly that if the attorney made an error, that is the attorney’s responsibility, not yours.
Can you switch to a different attorney? If so, that would give you leverage.
You can tell your real estate agent that you will not pay it and want to switch to a different attorney. You can say you’d rather let the deal pass than pay a big fee that is not your responsibility. At that point, the two realtors can decide if they want to pressure the attorney or if they want to split the fee themselves.
Good luck and please write back and let me know what happened.
Hi Carolyn, What do you think about these fees?
ALTA 8.1 Endorsement $175
Closing/Escrow Free $3,228
Closing/Escrow/Title – Misc Fee $45
Courier/Exp Mail – closing Agent $83
Lender’s Title Insurance $2,898
Notary $275
Recording Service Fee $25
Sub Escrow $63
Hi Carolyn,
What do think about these fees?
ALTA 8.1 Endorsement $175
Closing/Escrow Free $3,228
Closing/Escrow/Title – Misc Fee $45
Courier/Exp Mail – closing Agent $83
Lender’s Title Insurance $2,898
Notary $275
Recording Service Fee $25
Sub Escrow $63
I extremely dislike a situation where the title company and escrow company are two different companies. The main reason is because too often it causes issues at closing. The secondary issue is that it costs more.
Fees are based on the loan amount, and I have no way of knowing what your loan size is. Also, fees vary from state to state and even by county within the state.
I will tell you that last month, I saved a homeowner $900 by switching from separate title/escrow companies to one good company — in California, loan amount $410,000.
If you have already signed a Purchase Contract that specifies which title company and which escrow company will be used, then you have already agreed to use them and accept their fees.
Good Morning Mrs. Carolyn 🙂 we are a just married couple of just married high school sweethearts. And we are getting ready to close our loan. We want to go with the Tx Vet loan and I am super discouraged about this fees I just found on the Good Faith Estimate our current lender sent us a week ago. Could you please tell me when you can if I am correct in assuming these are junk fees? … Our closing cost are already a bit high, the last thing we want is to pay for bogus fees
🙁 Please help us <3 thank you! :
"Bogus Fees" -?
Courier Fee- $30
Processing Fee- $650
Underwriting Fee-$995
E Recording Fee- $35
Lenders give you a choice of paying an underwriting fee (typically right around $995) or taking a higher interest rate. If you want the lowest rate without paying points, then the underwriting fee is required. What I don’t like is the $650 processing fee on top. I wonder if your lender is using that to cover the escrow/settlement fee for you? This is an example of why I cannot advise people on their fees without seeing the actual Loan Estimate or Fees Worksheet. Additionally, I don’t know if the other two fees are being charged by the lender, the title company, or escrow/settlement agent. Either way, they are annoying fees that are not charged by the best companies.
A lender may not charge a Veteran more than 1% in fees.
You mention that you are getting ready to close on your loan. That is not the time to start looking at fees! You are supposed to do that in the very beginning as part of your process in choosing a good lender.
If you used my method for lender shopping upfront (before you went house shopping), then you would not be in a position to receive bad surprises midway through the process. Both Mortgage Rip-offs and Money Savers & the book Homebuyers Beware explain how to avoid such situations and how to find the best lender.
Once you are in contract and have the appraisal ordered, it is too late to try to find a good lender and still close on time. I think you will have to consider this one of those Life Lessons, and then next time you purchase a house, choose a good lender before going into contract.
I can email you the Approximate Loan Cost Illustration we got. We have not signed anything that legally binds us to the lender, only the real state agent so far. Also, the origination fee is higher than 1% with fair reason, since the program we are choosing to go with for financing is actually 2% of the loan amount. My prerogative here is that they are charging us a processing and underwriting fee both, a courier fee which we never used any services like FedEx or USPS everything was emailed and or delivered personally. Lastly the E-Recording fee , I understand a Recording fee, but “E-Recording” ? I just don’t want to be taken advantage of. If you please have the time to consider overlooking my ALCI I can email it to you for consideration. This is really frustrating Mrs. Warren but unfortunately we don’t have a lot of wise nor knowledgeable people on the subject to ask and get good advice from. Please, if its possible , I would love your help .
Thank you
Claudia, I am not licensed in Texas. I suggest you call a mortgage broker in TX and ask for a Cost Estimate. That way, you can do a side-by-side comparison and choose the best lender.
Thank yopu very much Mrs. Warren
How junky is this. I am so frustrated.
TITLE CHARGES
Lender/Mortgagee Premium for 264,000.00: XYZ National Title Company of California 467.00
Endorsement: XYZ National Title Company of California 200.00
Deed Recording Fee: XYZ National Title Company of California 40.00
Deed of Trust Recording Fee: XYZ National Title Company of California 95.00
Recording Service Fee: XYZ National Title Company of California 18.00
Wire/Courier: FYZ National Title Company of California 50.00
Sub Escrow: XYZ National Title Company of California 62.50
ESCROW CHARGES TO: HIDDEN Escrow Services, Inc.
Escrow Fee 978.00
Loan Tie-In Fee 345.00
Wire Fee 50.00
Courier/Messenger Fee 150.00
I asked for estimated fees last week and they just now are getting them to me.
Jason, thank you for your input on California junk fees. If you would include the title company’s and the escrow company’s names, then it would help other borrowers. Since this is documented fact, there is no reason to keep the names hidden. It is actually public information on a company’s online fees calculator, but people need to know which companies these are.
Additionally, I am against using different companies for title and escrow, as explained in my books and in previous blog posts. Why? Because you don’t get any possible discount (typically 10%) offered by title companies for also using their escrow service, you incur a sub-escrow fee, it opens another door for errors, and it often takes longer for closing because two different companies have to communicate with one another
Here is Smith Thompson Shaw in Florida (Includes mortgage fees also). This was on a $140k mortgage on a home I flipped and sold. I paid closing costs on behalf of Buyer for an FHA loan. I have now paid the $100 HOA Estoppel fee twice (when I bought and when I sold 3 months later) to the same management company. I have paid property taxes twice and most recently when I sold they Escrowed 13 months of property taxes??? WTF. The County taxes at the bottom have now also been paid twice. When I bought I paid Jan – June estimated at $555, and now when I sold I paid January – September of $969 (below). We used First International Title company on another home I bought shortly after this one, and their fees were even higher. Come to find out the two companies are in bed with each other and owned by First International.
Description Buyer’s Closing Costs on CD
Appraisal fee to Dart Appraisal 570.00
Credit Report 33.50
Documentary Stamps on Note 276.89
Documentary Stamps on Note 484.74
Flood certification 8.00
Loan Discount Points 173.06
Loan Origination fee 695.00
Mortgagee’s Title Insurance 767.50
Mortgage Title Plus Endorsements 130.50
Owner’s Title Insurance (primary issue) 37.50
Mortgage Insurance Premium 2,381.13
Prepaid Interest 79.65
Prepaid Insurance 750.00
Recording Fees 12.00
Survey Fee to A.D. Platt & Assoc 350.00
Title – Closing fee 395.00
Escrow – Property Taxes $105.99 per month for 13 months $1377.87
Documentary Stamps on Deed 987.00
HOA Estoppel Fee 100.00
Real Estate Commission 3,525.00
County Taxes 1/1 – 9/25 969.09
Transaction fee to Keller Williams 250.00
Thank you for your post, Matt.
The first bogus junk fee I don’t like is $250 to Keller Williams. The realtor made their $3525 commission. There is no reason why some realtors are adding another fee. It is just WRONG! I would never recommend using a real estate company that adds a bogus fee, because it perpetuates this new rip-off. What’s more, it is illegal to charge a fee that no work was done for. They need to be able to prove to you what extra work they did to earn $250 on top of their commission.
As for property taxes, you can contact your local tax assessor’s office to find out if you overpaid. If you overpaid, you can get a refund. However, be aware that if taxes are collected annually, then 13 months is normal to collect. They must have a little extra in the account in case the next property tax bill comes in higher. Taxes collected are regulated by federal lending law, so there should not be any rip-offs (only honest mistakes that can be remedied with a refund) when it comes to property taxes.
What about fee that is listed under “commmission agreeement” form to be paid to buyer’s brokerage that are not a commission per agent and go towards cover brokerage’s leagal review of documents? Why is commissions foem being used for this fee
ans why is buyer being asked to pay this fee?
MJ, are you referring to the commission to the real estate brokerage or the mortgage brokerage? What form are you referring to?
Thanks Carolyn for the good article. Below is my payment to escrow company, can you please take a look and give me your thougths. I bought the house in Irvine, CA in 2017.
Settlement Agent fee: $2185
Loan tie in fee: $325
HOA processing fee: $50
Overnight fee: $90.08
Wire fee: $175
Thanks,
Derek
Derek, thank you for reading this post. A settlement fee is based on the loan amount, and I don’t have that figure. Additionally, I don’t see the title insurance figure. My favorite title-and-escrow companies in CA don’t charge a loan tie-in, HOA processing, overnight, or wire fees.
Carolyn Warren
Hello,
I am closing on June 1st and was wondering what you think I should do about these Fees from Pickford Escrow Company and California Title Company:
Archive Fee – $90
E-Recording Fee – $20
Endorsement Fee – $50
Escrow Fee – $2025
Lender’s Title Insurance – $1383
Loan Tie-in Fee – $350
Notary Fee – $200
Processing Fee – $160
Shipping Fee – $100
Sub-escrow Fee $150
Wire Handling Fee – $15
I am in San Diego, CA. Seller does not have a mortgage. Purchase price is mid $800k. Should i try to switch settlement agents to First American? Is there time?
Thank you for your time
Shaun, I am sorry to hear you have an escrow company that charges so many extra nonsense fees. Your purchase contract that you signed no doubt designates this over-charging company, so in order to change escrow companies, your realtor would have to ask the seller to agree and then amend the purchase contract. Since your closing is only days away, that will not be possible. I would take this as a Life Lesson and next time, choose a good escrow company before signing the purchase contract. The one thing you can try is to Call Pickford and tell them you want the following junk fees waived, and if they don’t you will write bad reviews on Yelp, Google, Better Business Bureau and even the CFPB. Junk fees are Archive Fee $90, E-recording fee $10, Shipping Fee $100, Processing $160, and Wire Handling $15. That’s the bare minimum! You should also complain to the two real estate agents who allowed that horrid company to be designated on the purchase contract!
Thank you for the fast response! I was able to email Pickford and they agreed to waive the Archive Fee, Processing Fee, Shipping Fee and Wire Fee! in the future I will definitely designate the Escrow company I want to use instead of allowing seller to pick one
GOOD work in getting those fees waived!!! I am happy for and proud of you for standing up for what’s fair. I would like to use this as a success story in a future blog post to encourage others to do the same.
Is the sub-escrow fee still required when the Seller does not have a mortgage?
The sub-escrow fee has nothing to do with the seller. Sometimes a lender requires it when you are using two different companies for title and for escrow. I favor using one company, such as Old Republic or First American, for both title and escrow. You have one title company and then this escrow company. Ask your loan officer if the sub-escrow can be waived or not. With some lenders, it is mandatory in this situation.
Thank you so much for writing an insightful blog. I am in the middle of a contract, haven’t closed yet. Here are the fees that my escrow company is charging in CA for a loan for $1.2M:
1. ALTA Environment Protection Lien – $25
2. Title – Concurrent Loan Service Fee – $340 (I only have one loan)
3. Title – Courier Fees – $75
4. Title – Escrow Fees – $1875
5. Title – Lender’s Title Insurance – $3275
6. Title – Mobile signing fee – external notary – $175
7. Title – Recording Service Fee – $14
8. Title – Owner’s Title Insurance – $1396
I have a strong feeling that I shouldn’t be paying Concurrent Loan Service Fee, Recording Service Fee, Mobile Notary and courier fee. How do I negotiate these down?
Thank you.
No Mortgage involved on both sides. Do these sound right for vacant land purchase of under $100k?
Escrow Fees
Title Escrow Fee: $550
Title Doc Prep Fee: $250
Other
Escrow Company for Messenger Fee: $150
Escrow Pad: $500
Escrow Company for Wire Service: $30
Title/Tax/Reg – Title Company (not the same as escrow company)
Title (sub escrow, wire. recording service fee): $110.5
Recording grant deed: $50
Thanks
I don’t like the needless junk fees for the escrow company. Also, I don’t like a sub escrow situation and see no reason to use (1) an overpriced escrow company, and (2) a different tile company when you can use one expert company for both sides, such as First American Title & Escrow, Old Republic Title & Escrow, Ticor Title & Escrow.
The $500 pad is okay because that will be refunded to you if not used.
I don’t know what state your property is in and base fees vary greatly from state to state.
I wish you the best with this situation!
State: CA
I thought “Escrow doc fee of $250” was junk. And maybe “Escrow Company for Messenger Fee: $150” too. I could be wrong.
I should have used my own escrow/title company and saved a few hundred bucks here. Good lessons to learn here. Thanks for your reply.
Yes, I agree with you.