Bogus Fee? 801 Loan Origination 'Plus' - what is this? (insurance, fees, upfront)

[helppls]

I'm reviewing the GFE for a bank that is offering us the lowest rates by leaps and bounds... I am a little wary so I am looking carefully.

This bank say they quote their rates in 2 ways/options:
Option 1 - rate with NO lenders fees. This rate is 0.125% higher and pays for all the Lenders's fees which is approx. $1300.
Option 2 - rate is 0.125% less than opt.1 and buyer payer for all fees.

I only got the GFE for Option1. Listed is 801 Loan Origination 'Plus' amount to Lender $325 (this come out to be a bit less than 1/16pt or percent of the loan amount.) Its part of the 'Fee paid by Lender' category. So I imagine this is a like a bogus origination fee for Option 2, yes?

I'm leaning towards Opt 2. as paying for $1300 now is a lot smaller than the $15k difference in interest over 30yrs. What do you think? Are these origination fees 'Plus' (whatever 'Plus' means ) negotiable at all?

Lastly, I in talking to the lending officer about in the even we do not take the loan right up to closing, both in email and verbally told me we would only be out of the upfront application fee and nothing else. BUT at the bottom of the GFE, there is a line that says otherwise "If for any reason the loan I (we) have applied for does not close, and if permitted by applicable law, I (we) agree to reimburse the lender for any and all costs incurred to process my (our) application including, but not limited to: appraisal, survey, and title insurance." Who do I believe?

[renriq02]

varies per state.

Some states do not allow upfront fees

What state are you in?

[helppls]

Hi I'm in NY. Its like a bogus point, right?
If I chose the higher rate option where the bank pays for the "lender's fees", that cost obviously disappears..

But if I take the lower rate option, I'm obviously paying for that - so its like buying down, right?

[renriq02]

there's no such thing as a bogus point

lenders charge what they want and call it what they want.

If your best deal's GFE reads like this

4.5% 30yr fixed 200k loan amount
801 - bogus fee 1%
802 - junk fee 100 bucks
803 - i wanna charge you just because 100 bucks

total fees 2200

Lender b
5% 30yr fixed 200k
801 - Legitimate fee 1%
802 - state law requires me to charge you this 100 bucks
803 - if i dont charge you this i wont be able to pay my light bill 100 bucks

total fees 2200

what's the difference?

the rate. One is at 4.5% the other is at 5%

most people get caught up in whether it's a bogus fee or not..
that makes no difference.

what you need to look for is the best deal
to do that you need to shop/compare the fee amount...not the fee name
Every lender may use a different fee name...doesnt matter what it's called. what matters is that it's coming out of your pocket.

Originally Posted by helppls

Hi I'm in NY. Its like a bogus point, right?
If I chose the higher rate option where the bank pays for the "lender's fees", that cost obviously disappears..

But if I take the lower rate option, I'm obviously paying for that - so its like buying down, right?

[helppls]

yes, you are absolutely right. I just called it bogus because its got a funny name "loan origination 'PLUS."
So at this point I would be comparing to see if it was more worth it for me to take the lower (by 0.125%) rate and pay the lender's $1300 fee OR take a higher rate to forgo $1300. I need to find a calculator or something to help me understand what this mean...