Mortgage Broker Fee in Maryland - What's Legal?

6 Replies

Hi everyone!

I have an agreement with a broker in Maryland to pay them 2% for a deal that I just closed. I however learned later that he had charged the lender 1.5%. I read somewhere that mortgage brokers cannot legally be paid by both the buyer and the lender. Is that correct?

Am I doing something wrong for writing this guy a check? The lender refused to put the broker's 2% on the HUD-1.

Thanks!

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Nicole,

It's a serious RESPA violation to pay mortgage broker fees outside closing.  Not sure who you used, but RESPA covers all 50 states, not just Maryland.  Was this for a primary residence?

Stephanie

If its not on the Closing Statement then it's not legal.  Yes even in Maryland. 

There is a reason your lender refused, a good one. 

Originally posted by @Nicole Bryan :

Hi everyone!

I have an agreement with a broker in Maryland to pay them 2% for a deal that I just closed. I however learned later that he had charged the lender 1.5%. I read somewhere that mortgage brokers cannot legally be paid by both the buyer and the lender. Is that correct?

Am I doing something wrong for writing this guy a check? The lender refused to put the broker's 2% on the HUD-1.

Thanks!

 I'm not a lawyer, this is not legal advice. But...

Tell him to pound sand. It's not like he is in a position to call the police on you.

The more polite/tactful way to do it would be to bluff: say you are happy to pay, and ask for a post-consummation revised Closing Disclosure with that fee on it, and you will bring your check to the escrow/title office who will disburse it accordingly. Pretty sure I know what the answer will be.

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