What must an MLO disclose to a borrower regarding fees?

An MLO must disclose all origination charges and other fees to a borrower to ensure transparency and compliance with regulatory requirements. This encompasses not only the origination fees, which are directly linked to processing the loan, but also any additional fees that may be incurred in obtaining the mortgage. These can include application fees, underwriting fees, and other closing costs.

This comprehensive approach to fee disclosure is vital because it allows borrowers to have a complete understanding of the costs associated with their mortgage, promoting informed decision-making. Federal regulations, such as the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), specifically require lenders to provide a detailed breakdown of all fees in their loan estimates, thereby helping to prevent hidden costs and ensuring borrowers are not surprised by additional expenses at closing.

By requiring disclosure of all relevant fees, the intention is to create a more transparent lending process, which ultimately benefits borrowers by empowering them with the knowledge they need to compare different loan offers effectively.