New York Times Cautions Borrowers

new york times cautions borrowersOn Sunday August 7th, the New York Times cautions borrowers about hidden swap fees.  The Pulitzer – prize winning columnist, Gretchen Morgenson, revealed that banks are charging commercial borrowers substantial undisclosed fees amounting to between 1% and 5% of their loan amounts. These hidden fees are being passed by inflating interest rate swaps without advising the borrowers.

New York Times Cautions Borrowers About Hidden Bank Fees

In the article posted in the Business section of the Sunday paper, approximately 2/3 of the way into the article, Ms. Morgenson cites the beneficial work done by Swap Negotiators on behalf of borrowers and extensively quotes our Managing Member, Greg Warren. We are proud to attach this article, entitled Wall Street’s Tax on Main Street from the New York Times website.

Attachment: NY Times Article pdf

1 Comment for this entry

Marketing Consultant
January 26th, 2013 on 11:28 pm

For most lenders, upfornt fees are pure profit. They charge fees for reviewing documents, looking over applications, and even for visiting properties. For the most part, these are junk fees, and many lenders who charge them never plan to make a loan to you, they just want those fees.However, there are a few upfornt fees that are standard with most hard money transactions. Most notably, the appraisal or BPO. Since hard money loans are asset based loans, value needs to be confirmed before a loan can be fully approved. Since value is always in question until that appraisal or BPO is done, the lender is not going to front this cost for the borrower. Typically, the appraisal or BPO cost is the responsibility of the borrower. However, even in those situations, you should be able to get a conditional approval from the lender, pending the appraisal or BPO, or, at the very least, a letter of interest confirming the lender’s guidelines that need to be met for an approval.Under no circumstances should you provide a lender or broker with any money until you know what the lender’s parameters are. +1Was this answer helpful?

Fri, September 14, 2012 @ 4:31 AM