Loan origination fee

A loan origination fee is paid with a loan application when applying for a mortgage. It is one of several fees paid to the agency that originates a mortgage and processes the loan application.

Expanded Definition

This fees pays for the collection of a book of documents detailing the financial history of the borrower. This information makes it possible for the loan originator to sell the mortgage to others. Resale transfer the mortgage to others with capital to lend and passes it into the hands of a mortgage service company who processes payments and maintains records of the mortgage.

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Related Terms

• Mortgage
• Subprime mortgage debacle

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