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When you talk about things that irritate people, unanticipated miscellaneous charges that show up in any commercial transaction have to be really high on the list. The mortgage industry has developed this to a high art. I can remember when I got my first mortgage. There were no extraneous fees, not even for an appraisal. Now, admittedly, that was in 1969 in a Savings & Loan Association dominated business. They did business in their home towns, their loan officers were expected to know the area and to do the appraisals themselves. The lenders kept the loans in their own portfolio and didn't have to satisfy anyone else except for the occasional regulator who came through town. Today it is a different world with virtually every loan having to meet national criteria in almost every regard. Loans and their documentation today are expected to meet the standards of the Secondary Market, mostly FannieMae, FreddieMac, and Wall Street sources. They have manuals that are hundreds of pages long and the standards they set are quite specific. If some aspect of documentation is done wrong, the loan is not salable. Even for banks that do not want to sell their loans, the regulators still require that the loans they fund meet those standards so that IF they had to sell them in the future, they could. Most of the junk fees are to pay for the costs that lenders incur in meeting those requirements. We'll talk about specific fees in upcoming posts, but I wanted to set this stage so you would understand the reasons for their existence. As objectionable as they might seem, there is virtually no way of making them go away, but some lenders specialize in hiding them so you can't see them. You're just paying for them some other way. Do you have a question about mortgage fees that you want answered in this series? Share it in the comments section below!

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