Tracking Fee Information
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Tracking Fee Information |
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Note: The following survey summarizes the state law regulating the authority of a licensed mortgage lender to pass through to borrowers the cost of obtaining hazard insurance tracking services. These services include monitoring the insurance coverage obtained for a property, but not the premium of any force-placed insurance that the lender may buy if coverage lapses. The cost for these services would be a one-time fee paid at closing to the service provider. The law summarized is that applicable to a typical licensed lender permitted to make first mortgage loans. Please note however, that not every type of licensed lender permitted to make first mortgage loans is covered in this summary.
Where the result of a particular state is listed simply as “no express statutory provision,” there is no comprehensive statutory scheme in that state that either requires licensing for mortgage lenders or substantively regulates mortgage lenders. Where the result mentions a particular licensing statute but states that there is no express statutory provision regarding insurance tracking fees, the licensing statute, and any related statute or regulation, do not specifically address whether such fees are permitted or prohibited.
Finally, this survey is limited to fees and charges permitted for loans other than “high-cost” mortgage loans. Many states have special limitations on the type and amount of fees and charges permissible in connection with loans having interest rates or points in excess of certain statutory thresholds. Lenders should proceed with caution with respect to such loans.
This survey is intended to provide general information only and is not intended to serve as legal advice or as a complete compilation of applicable legal authority. Consult with local counsel for a full analysis of this issue, including developments in applicable case law or administrative interpretations.