Paying off your mortgage loan is a big achievement. Make sure you, your escrow officer, your attorney or whoever is handling the final payoff pays attention to the fees you are charged. Most lenders or servicing company’s which handle your payments are straightforward. Unfortunately, some stray from full transparency and collect fees which are in excess of what is actually owed. Keep in mind final fees vary from state to state.
In California, Senate Bill 2 took effect January 1, 2018. Called the Building Homes and Jobs Act anyone paying off their mortgage were assessed a $75 fee. While the fee may appear excessive, it was approved so that amount “Is what it is!!”
Paying off a mortgage normally consist of your lender receiving the final payment, preparing a “Reconveyance Deed” and filing it with the County Recorder where your property is located. Using Los Angeles county as an example the lender will charge a statement fee ranging from $25-$40, which includes preparing the Reconveyance document. They send the document to the Recorder who charges anywhere from $15-$25. The key is any fees charged must be for work actually completed. By the time you add SB2 your total fees to payoff your loan should NOT exceed $100.
It’s the SB2 fee that is raising concerns as some lenders have been known to manipulate communicating to borrowers the exact amount due. Some will add on a blanket amount over and above the State mandated $75. For some homeowners the amount could range from $150-$250 and more. Most homeowners do not know about SB2 and are forced to take “their lenders word” in getting an explanation of the charge. Lenders on the other hand have been known to use a very dubious answer such as, “Oh! it’s a State mandated fee.” The facts are simple, you can only be charged for actual work and for SB2 the fee is clear at $75.
“Most homeowner’s never question the fees their lender charges because as long as they are within reason, they just pay them. They don’t realize many of those fees are posted and you can only be charged on what the actual fee is.” anonymous Los Angeles County Registrar staff
Pay attention to your payoff statement and make sure you receive a FULL explanation on any fee you are not sure about.