SECTION 83.707. Other Fees

(a) Generally. Fees not otherwise permitted by §83.705 or §83.706 of this title (relating to Amounts Authorized to Be Charged After Consummation and Amounts Authorized to Be Collected on or Before Closing) may not be charged or collected in a secondary mortgage loan transaction.

(b) Examples of unauthorized fees. Fees not authorized by either §83.705 or §83.706 of this title include, but are not limited to, commitment fees, broker fees not covered by subsection (d) of this section, pay-off statement fees, prepayment penalties, fax fees, courier fees, settlement or closing fees, tax certificates, expedited payment fees, and escrow management fees.

(c) Escrow services. An authorized lender making a secondary mortgage loan may require a borrower to make payments into an escrow trust account for payment of anticipated tax and property insurance expenses. A fee may not be charged for managing an escrow trust account.

(d) Broker fees. An authorized lender may pay a broker fee in a secondary mortgage loan if the consideration paid by the borrower in the loan that involves a broker does not exceed the consideration paid by the borrower in a loan that does not involve a broker.

(1) Example 1: A prospective borrower is quoted a contract rate of 12% plus a 2% origination fee when he makes his inquiry directly to an authorized lender. On this same individual, a broker quotes a contract rate of 12% plus a 4% origination fee for a loan of the same amount from the same authorized lender. The charge for an additional 2% origination fee is an unauthorized charge.

(2) Example 2: A prospective borrower is quoted a contract rate of 12% plus a 2% origination fee when the borrower makes the inquiry directly to an authorized lender. On this same individual, a broker quotes a contract rate of 12% plus a 2% origination fee for a loan of the same amount from the same authorized lender. The loan is then consummated with the authorized lender paying a 2% fee to the broker for originating the loan. Since the authorized lender has absorbed the expense of the fee, no unauthorized charge has been assessed, charged, or received.

(e) Seller's points. Seller's points are treated as interest. Seller's points are aggregated with other interest charges for the purposes of a usury calculation.

(f) Discount points. Discount points are treated as interest. Discount points are aggregated with other interest charges for the purposes of a usury calculation.

(g) Origination fees. Origination fees are treated as interest. Origination fees are aggregated with other interest charges for the purposes of a usury calculation.

Source Note: The provisions of this §83.707 adopted to be effective November 9, 2006, 31 TexReg 8994; amended to be effective November 4, 2010, 35 TexReg 9698; amended to be effective November 8, 2018, 43 TexReg 7338