real estate finance - full book (500 pgs)

10 26 licensing school for appraisal cpa contractors

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Unformatted text preview: he maximum will be $700 with the 5% applicable to numbers in between. BROKER'S COMMISSION Mortgage loan brokers are regulated by law in the percentage amount of commissions that they may charge, as shown in table below. The brokers commission is regulated for first trust deeds under $30,000 and second trust deeds under $20,000. Maximum commissions for applicable loans are outlined in table 10–1. As the table shows, the shorter the term of the loan, the less commission the broker may charge as a percentage of the face amount of the loan. On loans of $30,000 and over for first liens, and $20,000 for junior liens, the broker may charge as much as the borrower agrees to pay. Even for loans covered by the law, however, competition frequently keeps the rates below the maximum allowed. There is of course no limit as to the commission that can be charged for first trust deeds of $30, 000 or more and second trust deeds of $20, 000 or more. Figure 10-1: Maximum Commissions Type of Loan First Trust Deeds Junior Trust Deeds Less Than Two Years 5% 5% Two Years but Less Than Three 5% 10% Three Years and Over 10% 15% Exempt Transactions loans of $30,000 and over loans of $20,000 and over Figure 10-2 Maximum charges for other costs and expenses Loan Amount Under $7,801 $7,801 to $13,999 $14,000 to $29,999 First loans of $30,000 and 10-23 Dynasty School (www.dynastySchool.com) REAL ESTATE FINANCE over and junior loans of $20,000 and over No legal limitations Maximum Charges $390 5% of loan $700 Example: 1. $5,000 Loan 5,000 x 5% = $250; But fees can be 5% or $390 whichever is greater $390 is greater than $250 2. $9,000 Loan 9, 000 x 5% = $450 But fees can be 5% or $390 whichever is greater $450 is greater than $390 3. $19,000 Loan 19,000 x 5% = $950 But fees can be 5% to a maximum of $700 so, the fee cannot exceed $700. EQUAL PAYMENTS Loans Under Three Years – Loans secured by a lien on real property (other than a note given back to the seller by the buyer) which provide for installment payments over a term less...
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