ICS Loan Funding Fee Agreement
Download ICS Funding Fee Agreement
OVERVIEW
The ICS Funding Fee Agreement outlines the fees charged by ICS to the Borrower. The agreement ensures that ICS and the participating Lending Partner are paid at closing. In most cases, Lending Partners charge 2 points (2%) on the Funding Fee Agreement, but can charge more or less depending upon the loan size. It is recommended to always charge 2 points. In the event ICS is able to negotiate Lender Paid Yield Spread Premium with the funding lender, ICS and the participating Lending Partner make more. This also enables you to reduce the points charged to the Borrower at your discretion, which you will likely not have to do.
IMPORTANT THINGS TO KNOW
It's recommended to present your Funding Fee Agreement to the client once they have agreed to allow you to arrange their financing. This establishes your fees from the beginning with no surprises down the road. In most cases, before sending a client a FFA, you have already established which loan product is best for their financing situation, and provided estimated market rates and terms from the website. If they are comfortable with the estimated rate ranges, and would like a hard rate quote and term sheet from one or more lenders, then it is time to send over the Funding Fee Agreement.
FEE SENSITIVE BORROWERS
If a Borrower feels a 2% broker fee is too much, you can let them know that we have the ability to reduce that fee in the event we are able to negotiate Lender Paid Yield Spread Premium. This is not available on all loans. It's ok to be transparent. For example, if a lender agrees to pay an additional 1% in YSP to ICS, we can reduce the broker fee to 1%, at your discretion. In general, you should not have an issue with getting 2%. It is also important to know that ICS can often negotiate no lender points on many loans, saving the client a substantial amount of money.
UPLOADING FUNDING FEE AGREEMENT TO LOAN
Once you have a signed FFA from the Borrower you should always upload this signed document to the loan file from the loan details page. We must have this document uploaded.
LENDER FEES AND DEPOSITS
Lender fees and deposits are always TBD. All lenders will charge different deposit amounts to the Borrower once a Term Sheet is accepted by the Borrower. Since these fees vary by lender, we input TBD. Lender deposits typically cover lender underwriting, 3rd party reports, legal, and appraisal.
ICS LOAN PROCESSING & UNDERWRITING FEE
ICS charges a $2,500 loan processing and underwriting fee paid by the Borrower at closing. ICS does not require any upfront deposits or fees prior to successfully closing a loan. The loan processing and underwriting fee covers the time and costs associated with evaluating, structuring, and underwriting the loan across multiple lenders, which is a tremendous amount of work. This fee also covers preliminary title reports, tax review, and a Borrower background check. Lending Partners are not paid on loan processing and underwriting fees.