Judge Says Mortgage Broker Fees Kickbacks

WASHINGTON, D.C.--Certain fees routinely paid to mortgage brokers nationwide constitute illegal kickbacks. That's according to a ruling by U.S. District Judge Albert V. Bryan Jr., Alexandria, Va.

Bryan's ruling came in response to a motion by Virginia-based Crestar Mortgage Corp. and Saxon Mortgage Inc. to dismiss a class-action suit filed against them by two Maryland couples.

Fees--such as overages and back-end points--paid to local mortgage brokers by lenders who buy their loans is a common form of compensation in home lending, and the mortgage broker industry is apparently none too pleased with Bryan's ruling.

Mortgage brokers argue the fees are legitimate, and brokers save lenders overhead by taking on staffing and other expenses the lender would otherwise have to pay to conduct business, according to a Washington Post article.

But some industry observers say such payments are camouflaged referral fees for signing up unsuspecting mortgage customers at higher rates than the lowest available.

Fannie Mae Web Site Smartens Buyers

WASHINGTON, D.C.--Fannie Mae has launched a new World Wide Web site--http://www.homepath.com--where you can send techno-savvy buyers who need information about the financing process.

The site provides direct access to lender Web sites, resources that consumers may need to buy or refinance a home, and lists of lenders who offer Fannie Mae products.

Included are calculators to help consumers determine how much of a mortgage payment they can afford and how payments will vary at different interest rates and with different downpayments.

Homepath.com is the most recent step in Fannie Mae's Trillion Dollar Commitment to provide home lending for 10 million families by the end of the decade.