Who pay Lender's Attorney Fee?

Question

Hi,

I'm in the process of closing a deal as a buyer.  Part of the closing cost, the lender includes their legal fee which I believe is absurd because their attorney does not represent us and we never agreed to any of that service.

How often do you see this in a commercial deal?

Thanks

Peter M. · Answer

The lender has to pay their attorney to draft the paperwork. That cost is passed onto the buyer. Standard

John Thedford · Answer

If I have legal fees involved, my borrowers pay them or they don't get the loan.

Stephanie P. · Answer

You will pay it one way or the other.  If you don't want the money coming out of your pocket, raise the rate and get a lender credit.

This is always a borrower cost.

Tom Gimer · Answer

This is not a battle worth fighting... unless you want to eliminate the line item and add $1500 to doc prep.

Peter M. · Answer

It's called the money rule, "He who has the money makes the rules." There are a lot of aspects of business that aren't fair but regulation keeps the playing field leveler than if businesses were able to run wild with no oversight. The bank and those lawyers all have minimum rules and guidelines they have to go by.

Jon Mauro · Answer

Borrower will ALWAYS pay the legal fees. That said, I would recommend talking to the lender about the legal costs. They may be willing to use a more affordable attorney or capping the legal costs. As a lender, I had a stable of law firms I could use. I knew I could use certain firms for simpler deals or deals where I knew my borrower would be more sensitive to legal fees. I used other firms for more complex deals or deals in which I knew the borrower would be more tolerant of higher fees. In addition, as a borrower, your can do your part to keep legal costs down by keeping loan document comments to a minimum to minimize the billable legal hours. Of course there are important issues to push back on at times so try to negotiate any of those items before lawyers are engaged.

Jon Mauro · Answer

Borrower will ALWAYS pay the legal fees. That said, I would recommend talking to the lender about the legal costs. They may be willing to use a more affordable attorney or capping the legal costs. As a lender, I had a stable of law firms I could use. I knew I could use certain firms for simpler deals or deals where I knew my borrower would be more sensitive to legal fees. I used other firms for more complex deals or deals in which I knew the borrower would be more tolerant of higher fees.

Russell Brazil · Answer

Buyer pays.

Ronald Rohde · Answer

Are you paying your attorney to review? I'd wager you're losing more money over the life of the loan vs paying the lenders attorney.

Jessica Zolotorofe · Answer

Agreed. ALWAYS borrower cost.

Who pay Lender's Attorney Fee?

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