Super Contributor
ShanetheMortgageMan
Posts: 8,252
Registered: ‎09-28-2007
Re: Good Faith Estimates Explained
Section 1100 are the costs that are charged by the title/escrow/attorney company (as a general term, “closing company” or “closing agent” is used). These fees are estimated by the originator, and in some cases can be very precise. Ask your originator if they are estimating these fees or if they already have contacted a closing agent to obtain the costs laid out in this section.

Line 1101 is the Closing/Escrow Fee. This is the closing agent’s fee for doing their part in the mortgage transaction. The amount of this fee varies around the U.S., and even from closing company to closing company within the same geographic area in the U.S. On purchase transactions it’s usually a bit more than on refinance transactions. The closing company can be pre-selected by the mortgage company, by the seller (on a purchase), or you might be able to choose the one that is used on your mortgage transaction.

Line 1105 is the Doc Prep Fee. This is the fee that the closing company charges to prepare the loan documents for your signing. After the docs are prepared by the lender and sent to the closing company, the closing company prepares some of their documents such as the Final HUD-1, and in some cases the Grant Deed and other documents. This fee could also be for receiving docs via email and printing them out.

Line 1106 is the Notary Fee. Some closing agents charge a separate fee for the notarization of documents and some include the notary fee within the closing/escrow fee. If you are signing away from the closing agent’s office, a mobile notary fee is often charged in the amount of $100-150.

Line 1107 is the Attorney’s Fee. If you are in an Attorney State (New York, Georgia to name a couple), instead of a Closing/Escrow Fee you will be charged an Attorney Fee. It serves the same purpose. Another situation where someone would be charged an Attorney’s Fee is if there is some paperwork reviews required, or certain legal documents have to be prepared by an attorney, then an Attorney Fee could also be charged (regardless of which state you are doing the mortgage transaction in).

Line 1108 is the Title Insurance Premium. This is the premium for the title insurance which the lender requires to be obtained on a mortgage transaction. Title insurance protects whoever the insured is against defects in title to the property. There are two forms of this, the Lender’s Coverage, which is based on the loan amount and good for the life of the mortgage (so it’s terminated when the mortgage is paid off) and then also the Owner’s Coverage which is based on the purchase price which lasts even after the mortgage is paid off and even after the property is sold (so it’s forever). Lender’s coverage is always required on a mortgage transaction, while Owner’s Coverage is optional. Some examples of the protection that title insurance affords the insured are fraud, unrecorded easements (where someone has a right to enter your property), invalid deeds, and claims for unpaid inheritance/gift taxes from a previous owner.

Other title costs, which don’t always have a specific “line number” associated with them, are Endorsements, Courier/FedEx, and Wire Fee’s. Endorsements are used to change the coverage of the title insurance policy. An ALTA title policy provides adequate coverage for a majority of the “simple” real property transactions. If the transfer of title is not “simple”, the policy coverage needs to be added by endorsement to tailor coverage to meet the needs of the insured. The two most common title endorsements are ALTA 8.1 & ALTA 9, and often you are not charged for those endorsements. If additional endorsements are needed, such as if you are getting an ARM mortgage, financing a condominium or PUD, or doing a construction loan, then you are charged for those specific ones (usually around $25 to $125 per endorsement). Courier/FedEx fees are pretty self-explanatory, they are for any overnighting that needs to be done by the closing company (such as overnighting docs back to the lender) or if a deed/mortgage needs to be run down to the recording office for recording then a courier is used. Wire Fee’s are usually charged on a refinance transaction as the closing company needs to wire the amount of money to the mortgage company which is getting paid off.

Closing company costs can vary from area to area as well, so there are some fees that are charged which have not been mentioned – such as an Illinois State Policy Fee ($3.00) and other state specific fees. You are always more than welcome to ask what purpose a fee has.