Period end loans, net of deferred loan origination fees
, totalled USD269.8m representing growth of USD10.7m during the quarter and growth of USD17.8m from year-end.
In addition, the Company will record approximately $600,000 of loan origination fees
which will be amortized over approximately three years.
Closing costs typically include loan origination fees
, title insurance, escrow fees, homeowners insurance, appraisal fees and recording costs.
"With credit growth slowing down, limited possibilities to boost net interest margins [given tightening liquidity], a market reduction in loan origination fees
, banks can only reduce their operating expenses to shield themselves partially from the headwinds," said Jaap Meijer, head of Research at Arqaam Capital.
Jaap Meijer, Managing Director, Research commented, "With credit growth slowing down, limited possibilities to boost Net Interest Margins and a market reduction in loan origination fees
, banks are focusing on costs, though this is unlikely to provide a substantial cushion if the downturn were to worsen.
The improvement from the first quarter of this year is primarily the result of an increase in loan origination fees
Accounts/Transactions: Loan origination fees
* Caps on Loan Origination Fees
: Januar 10, 2014 brings a rule for the Qualified Mortgage that points and fees on mortgages cannot exceed 3%.
"We cap our loan origination fees
at $350," Scarboro said, "when we usually charge between 0.75% and 1%, and we have a more relaxed stance on debt-to-income ratios." Scarboro said the credit union had relaxed the ratio for these loans because of demonstrated evidence that a borrower's expenses in the new home will be significantly less than if they had not bought an Energy Star certified home.
Equitable Trust Mortgage was suspended from participating in the FHA program after HUD found evidence that the lender "improperly overcharged 37 borrowers for broker and loan origination fees
in excess of what [HUD] currently allows," a press release noted.
It also concerns the annual rate, which represents the total loan cost, including all fees, particularly loan origination fees