Don’t Forfeit $10,000 Of Commission By Making A Common Loan Origination Mistake

VA’s one percent origination fee cap applies to all lender/broker fees (excluding discount points). The lender’s maximum allowable flat charge of one percent of the loan amount (or greater percentage in the case of construction loans) is intended to cover all of the lender’s costs and services, which are not reimbursable as “itemized fees and charges.” However, it is essential to know that you have to disclose this cap according to the specific lender’s guidelines.

Most lenders allow you to collect a total of one percent of fees, comprised of itemized lender and third-party fees. However, other lenders require that all of the lender’s fees are aggregated into a single flat fee and disclosed on the LE in the following manner: “1% origination fee”.

What is the best way to disclose lender fees on a VA loan? 

Don’t charge itemized fees, ever! Always collect all of your itemized fees under the “origination fee.” In other words, disclose all of the lender fees on the LE under the term “origination fee.” Most importantly, always contact the lender and confirm that you have satisfied their requirements for proper disclosure.

When in doubt, contact your brokerage’s support team. They have experts and experienced staff who have dealt with many lenders and will know how to help you with your VA origination disclosure. 

And as always, Innovative Mortgage Services is here to help. Feel free to contact us with any loan origination questions, 727-372-8059.