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Texas Allowable Fees and Charges


*References to Texas Finance Code Section 342 apply only if interest rate is 10% or greater -or- loan has short payout rather than monthly payments.

Fees and Charges First Lien Second Lien*
Administrative Fee Not regulated. Texas Finance Code Section 342.308(a)(q) allows "an administrative fee not to exceed $25 for a loan of more than $1,000 or $10 for a loan of $1,000 or less which is considered earned at the time the loan is made or refinanced, which is not subject to refund, which may not be contracted for or received by the lender refinancing the loan more than once in any 180-day period if the loan is refinanced, and for which 50 cents of the fee charged is deposited with the comptroller for the purpose of fulfilling the responsibilities of the finance commission as required under applicable law.
Application Fee No limit on the amount or type of fee.

Maximum Fee: None.

Customary Fee: A combination of the appraisal fee and the credit report fee represents the application fee
Not allowed
Appraisal Fee Not regulated.

Maximum Fee: None.

Customer Fee: The actual fee charged
Texas Finance Code Section 342.308(a)(4) allows "reasonable fees for an appraisal of real property offered as security for the loan prepared by a certified appraiser who is not a salaried employee of the lender."

Maximum Fee: "a reasonable fee."

Customary Fee: The actual fee charged
Assignment Fee Not regulated.

Maximum Fee: None.

Customary Fee: Not customary

Not allowed
Assumption Fee Not regulated.

Maximum Fee: None.

Customary Fee: Not customary
Not allowed
Attorney's Fee Texas Gov't Code Ann. Sec. 83.001 states:

"'83.001. Prohibited Acts

(a) A person, other than a person designated in Subsection (b), may not charge or receive, either directly or indirectly, any compensation for all or part of the preparation of a legal instrument affecting title to real property, including a deed, deed of trust, note, mortgage, and transfer of release of lien.

(b) This section does not apply to:

(1) an attorney licensed in this state;
(2) a licensed real estate broker or salesman performing the acts of a real estate broker pursuant to The Real Estate License Act (Article 6573a, Vernon's Texas Civil Statues); or

(3) a person performing acts relating to a transaction for the lease, sale, or transfer of any mineral or mining interest in real property.

(c) This section does not prevent a person from seeking reimbursement for costs incurred by the person to retain a licensed attorney to prepare an instrument."

Maximum Fee: None.

Customary Fee: $200.00 to $500.00
Texas Finance Code Section 342.308(a)(2) allows "reasonable fees charged to the lender by an attorney who is not a salaried employee of the lender for preparation of the loan documents in connection with the mortgage loan if the fees are evidenced by a statement for services rendered."

See also "Document Preparation Fee."

Maximum Fee: "a reasonable fee."

Customary Fee: $200.00 to $500.00

Texas Finance Code Section 342.307(2) allows "reasonable fees paid to an attorney who is not an employee of the creditor in the collection of a delinquent secondary mortgage loan."

This fee must be expressly provided for in the loan contract.

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and Texas Finance Code Section 342.307(3) allows court costs and fees incurred in the collection of the loan or foreclosure of a lien created by the loan."
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Maximum Fee: "a reasonable fee."
Broker Fee Not regulated. Maximum Fee: None.

Customary Fee: Determined by market conditions.
Not chargeable to the borrower.

Office of Consumer Credit Commissioner in a letter to Secondary Mortgage Lenders dated December 31, 1981, expressly states "Brokerage fees are not authorized."

Office of Consumer Credit Commissioner Interpretive Letter 88-1, dated January 18, 1988, explains that brokers must be licensed under Article 5069-3 (Texas Credit Title Chapter 3A) if they are in the business of making, negotiating, or arranging secondary mortgage loans. If the funding lender absorbs the expense of the referral fee paid to the originating lender and the borrower pays the same basic interest rate and the same amount of prepaid interest regardless of which authorized lender makes the loan, the lender may pay a licensed lender (broker) a fee."

Maximum Fee: None.

Customary Fee: Determined by market conditions.
 
Broker Points Not regulated.

Maximum Fee: None.

Customary Fee: Determined by market conditions.
Not chargeable to the borrower.

Office of Consumer Credit Commissioner in a letter to Secondary Mortgage Lenders dated December 31, 1981, expressly states "Brokerage fees are not authorized."

Office of Consumer Credit Commissioner Interpretive Letter 88-1, dated January 18, 1988, explains that brokers must be licensed under Article Chapter 3A) if they are in the business of making, negotiating, or arranging secondary mortgage loans. If the funding lender absorbs the expense of the referral fee paid to the originating lender and the borrower pays the same basic interest rate and the same amount of prepaid interest regardless of which authorized lender makes the loan, then the lender may pay a licensed lender (broker) a fee."

Maximum Fee: None.

Customary Fee: Determined by market conditions.
Closing Agent Fee
(Escrow Fee)
Not regulated.



Maximum Fee: None.



Customary Fee: Not customary because the Title Companies, typically selected by the seller or the real estate agent, normally conduct residential loan closings.
Not allowed if interest rate on loan is above 10%. Otherwise fee is permissible. TFC 342.308.
Commitment Fee Not regulated.

Maximum Fee: None.

Customary Fee: Not customary.
Not allowed. Office of Consumer Credit Commissioner in a letter to Secondary Mortgage Lenders dated December 31, 1981, expressly states "Commitment fees are not authorized."
Copy Fee Not regulated.

Maximum Fee: None.

Customary Fee: Not customary.
Not allowed.
Courier Fee Not regulated.

Maximum Fee: None.

Customary Fee: Not customary.
Not allowed if interest rate on loan is above 10%. Otherwise fee is permissible. TFC 342.308.
Credit Investigation Fee Not regulated.

Maximum Fee: None.

Customary Fee: Not customary.
Not allowed.
Credit Report Fee Not regulated.

Maximum Fee: None.

Customary Fee: Not customary.
Texas Finance Code Section 342.308(a)(5) allows the "reasonable cost of any credit report."

Maximum Fee: "reasonable cost."

Customary Fee: The actual fee charged.
Disbursement Fee Not regulated.

Maximum Fee: None.

Customary Fee: Not customary because the Title Companies, typically selected by the seller or the real estate agent, normally conduct residential loan closings.
Not allowed.
Discount Points Not regulated.

Maximum Fee: None.

Customary Fee: Determined by market conditions.
Office of Consumer Credit Commissioner Interpretive letter 81-9 dated July 14, 1981. According to an unpublished letter from the Office of Consumer Credit Commissioner dated December 1, 1981, points, origination fees and discounts may be charged as interest provided that, when added to the other interest and amortized over the term of the loan, the yield to the lender does not exceed the allowable interest rate at the time the loan was made."

Now Texas Finance Code.

Maximum Fee: Limited by Texas usury.

Customary Fee: Determined by market conditions.
Document Preparation Fee Allowed, but the documents must be drawn by a licensed attorney. See "Attorney's Fee" above.

Maximum Fee: None

Customary Fee: $200.00 to $500.00
Allowed, but the documents must be drawn by a licensed attorney not a salaried employee of the lender and if the fees are evidenced by a statement for services rendered." See "Attorney's Fee" above.

Maximum Fee: "a reasonable fee."

Customary Fee: $200.00 to $500.00.
Document Redraw Fee Not regulated.

Maximum Fee: None.

Customary Fee: Determined by contract and reason for redraw.
Not allowed.
Fax Fee Not regulated.

Maximum Fee: None.

Customary Fee: Actual Cost.
Not allowed.
Federal Express Fee Not regulated.

Maximum Fee: None.

Customary Fee: Actual Fee charged.
Not allowed.
Fee for providing Amortization Schedule Not regulated.

Maximum Fee: None.

Customary Fee: The actual cost of providing schedule.
Not allowed.
Flood Certification Fee Not regulated.

Maximum Fee: None.

Customary Fee: The actual fee charged.
Allowed fees: Texas Finance Code Section 342.308(a)(8) if "incurred to comply with a federally mandated program."
Funding Fee Not regulated.

Maximum Fee: None.

Customary Fee: Determined by investor.
Not allowed.
Late Charges There are no restrictions on late fees.

Maximum Fee: None.

Customary Fee: The Fannie Mae standard of 5% after 15 days.
Late charges may not exceed 5% of any installment not paid for 10 days or more following the date the payment is due. Late charges shall not be collected more than once on the same installment. Texas Finance Code Section 342.302.
Lender Inspection Fee Not regulated.

Maximum Fee: None.

Customary Fee: Determined by market conditions.
Borrower may pay only if interest rate is 10% or less.
Lock in Fee Not regulated.

Maximum Fee: None.

Customary Fee: Determined by market conditions.
Not allowed.
Notary Fee Not regulated.

Maximum Fee: None.

Customary Fee: Not customary because title companies normally conduct residential closings.
Not allowed.
NSF Fee Allowed under Texas Occupations and Business Code Article 9022 of Title 132. "Processing fee by holder of dishonored check" provides as follows:

"(a) The holder of a check or its assignee, agent, representative, or any other person retained by the holder to seek collection of the face value of the dishonored check on return of the check to the holder following its dishonor by a payor may charge the drawer or endorser a reasonable processing fee, which shall not exceed $30..."

Maximum Fee: $30.00.

Customary Fee: $30.00
Texas Finance Code Section 342.502(d) allows same fee as allowed by Article 9022 Vernon's Texas Civil Statutes i.e $25.00.

Maximum Fee: $30.00

Customary Fee: $30.00
Origination Fee or Points Not regulated.

Maximum Fee: None.

Customary Fee: Determined by market conditions.
According to a letter from the Office of Consumer Credit Commission dated July 14, 1981, points, origination fees and discounts may be charged as interest provided that, when added to the other interest and amortized over the term of the loan, the yield to the lender does not exceed the allowable interest rate at the time the loan was made.

Maximum Fee: Limited by the states usury law.

Customary Fee: Determined by market conditions.
Points Not regulated.

Maximum Fee: None.

Customary Fee: Determined by market conditions.
Office of Consumer Credit Commissioner Interpretive letter 81-9 dated July 14, 1981. According to an unpublished letter from the Office of Consumer Credit Commissioner dated December 31, 1981, points, origination fees and discounts may be charged as interest provided that, when added to the other interest and amortized over the term of the loan, the yield to the lender does not exceed the allowable interest rate at the time the loan was made."
Maximum Fee: Limited by Texas usury law.

Customary Fee: Determined by market conditions.
State Maximum Prepayment Penalty Texas Finance Code Section 302.102 prohibits prepayment penalties on residential mortgage loans secured by the homestead of the borrower if the interest rate on the loan is greater than 12% unless the charge or penalty is required by an agency created by federal law.
Maximum Fee: None.

Customary Fee: Not customary.
Not allowed.
Processing Fee Not regulated.

Maximum Fee: None.

Customary Fee: $150.00 to $300.00.
Not allowed. Office of Consumer Credit Commissioner Interpretive Letter 87-5, dated December 9, 1987.*
Recording Fee Allowed.

Maximum Fee: None.

Customary Fee: The actual fee charged.
Texas Finance Code Section 342.308(a)(3) allows "charges prescribed by law that are paid to public officials for determining the existence of a security interest or for perfecting, releasing, or satisfying a security interest."
 
Release Fees Allowed.

Maximum Fee: None.

Customary Fee: The actual fee paid to a government entity for recording the release.
Texas Finance Code Section 342.308 (a)(3) allows "charges prescribed by law that are paid to public officials for determining the existence of a security interest or for perfecting, releasing, or satisfying a security interest."
 
Review Appraisal Fee Not regulated.

Maximum Fee: None.

Customary Fee: Not customary.
Not allowed. See "Appraisal Fee."
Satisfaction Fee Not regulated.

Maximum Fee: None.

Customary Fee: The actual cost incurred in preparing and recording the release.
Texas Finance Code Section 342.308(a)(3) allows "charges prescribed by law that are paid to public officials for determining the existence of a security interest or for perfecting, releasing, or satisfying a security interest."
See "Release fee."
Servicing Release Premium Not regulated.

Maximum Fee: None.

Customary Fee: Not customary.
Not allowed.
State Specific Tax Fees on Mortgage Transactions None.  None.
Tax Service Fee Allowed.

Maximum Fee: None.

Customary Fee: The actual fee charged.
Not allowed
Transfer Fee Not regulated.

Maximum Fee: None.

Customary Fee: Not customary.
Not allowed.
Underwriting Fee Not regulated.

Maximum Fee: None.

Customary Fee: $100.00 to $300.00.
Not allowed.
Warehouse Fee Not regulated.

Maximum Fee: None.

Customary Fee: Not customary.
Not allowed.
Wire Fee Not regulated.

Maximum Fee: None.

Customary Fee: The actual fee charged.
Not allowed.
Title Examination, Title Insurance and Title Search Fees Not regulated.

Maximum Fee: None.

Customary Fee: The actual fees charged.
Texas Finance Code Section 342.308(1)(A) and (B) allow "reasonable fees for title examination and preparation of an abstract of title by an attorney who is not an employee of the lender; or a title company or property search company authorized to do business in this state; or premiums or fees for title insurance or title search for the benefit of the mortgagee, and, at the mortgagee's option, for title insurance or title search for the benefit of the mortgagor."
Maximum Fee: "a reasonable fee."
Survey Fees Not regulated.

Maximum Fee: None.

Customary Fee: The actual fee charged.
Texas Finance Code Section 342.308(a)(6) allows "reasonable fees for a survey of real property offered as security for the loan prepared by a registered surveyor who is not a salaried employee of the lender."

Maximum Fee: "a reasonable fee."

Customary Fee: The actual fee charged.
Federally Mandated Program Fees Allowed. Texas Finance Code Section 342.308(a)(8) allows "reasonable fees relating to real property offered as security for the loan that are incurred to comply with a federally mandated program if the collection of the fees or the participation in the program is required by a federal agency."

Maximum Fee: "a reasonable fee."

Customary Fee: The required fees.
Trustee Fees Not regulated.

Maximum Fee: None.

Texas Finance Code Section 342.307 allows "reasonable fees or charges paid to the trustee in connection with a deed of trust or similar instrument executed in connection with the secondary mortgage loan, including fees for enforcing the lien against or posting for sale, selling, or releasing the property secured by the deed of trust." This fee must be expressly provided for in the loan contract.

Maximum Fee: a "reasonable fee."
Mortgage Protection Insurance Not regulated.

Maximum Fee: None.

Customary Fee: The actual fee charged.
Texas Finance Code Section 342.308(a)(7) allows premiums for "other insurance that protects the mortgagee against default by the mortgagor, the benefits of which are applied in whole or in part to reduce or extinguish the loan balance."
Seller Points Not regulated.

Maximum Fee: None.

Customary Fee: Not customary.
If a lender is to receive seller points, such compensation must be considered as part of the interest received on the loan. Since seller points are received at the time of the loan they should be considered as prepaid interest in calculating the interest rate on the contract for the purpose of determining whether the rate charged is within the lawful interest rate ceiling. Office of Consumer Credit Commissioner Interpretive Letter 82-14 dated July 20, 1982*
Maximum Fee.

Customary Fee: Not customary.

*References to Texas Finance Code Section 342 apply only if interest rate is 10% or greater -or- loan has short payout rather than monthly payments.

Last revised: July 29, 2013

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