Under applicable North Carolina law (N.C. Gen. Stat. § 24-1.1A(c); N.C. Gen. Stat. § 24-8(a); N.C. Gen. Stat. § 24-1.2A(b)), only certain fees may be charged on home loans that are first lien residential loans (not equity lines) between $10,000 and $300,000 and made by a lender who is either:

(1) Approved as a mortgagee by HUD, FHA, or VA, a national mortgage association or any federal agency; or

(2) A local or foreign bank, savings and loan association or service corporation wholly owned by one or more savings and loan associations and permitted by law to make home loans, credit union or insurance company.

Only the following fees may be charged as agreed upon by the parties:

(1) Loan application, origination, commitment, and interest rate lock fees;

(2) Fees to administer a construction loan or a construction/ permanent loan, including inspection fees and loan conversion fees;

(3) Discount points, but only to the extent the discount points are paid for the purpose of reducing, and in fact result in a bona fide reduction of the interest rate or time-price differential;

(4) Assumption fees to the extent permitted by G.S. 24-10(d) (Generally $400 unless there's a modification or no due on sale clause, then $125);

(5) Appraisal fees to the extent permitted by G.S. 24-10(h) (Must be reasonable);

(6) Bona fide loan related goods, products, and services provided or to be provided by third parties which include: fees for tax payment services, fees for flood certification, fees for pest infestation determinations, mortgage brokers' fees, appraisal fees, inspection fees, environmental assessment fees, fees for credit report services, assessments, costs of upkeep, surveys, attorneys' fees, notary fees, escrow charges, and insurance premiums (including, for example, fire, title, life, accident and health, disability, unemployment, flood, and mortgage insurance);

(7) Taxes, filing fees, recording fees, and other charges and fees paid or to be paid to public officials;

(8) Fees payable to the federal government, any state or local government or any federal, state, or local governmental agency in connection with a loan made pursuant to a loan program sponsored by or offered through the federal government, any state or local government or any federal, state or local government agency, including loan guarantee and tax credit programs;

(9) Additional fees that are paid to the lender may not exceed the greater of:

(a) 1/4 of 1% of the principal amount of the loan, or

(b) $150.00 (N.C. Gen. Stat. § 24-1.1A(c)). Otherwise, only those charges expressly permitted may be charged (N.C. Gen. Stat. § 24-8(a); N.C. Gen. Stat. § 24-1.2A(b)).

The following audit generates for all North Carolina first-lien, closed-end loans less than $300,000:

WARNING: CONFIRM THAT FEES/CHARGES ARE AUTHORIZED UNDER N.C. LAW

Lenders must confirm that the fees/charges being charged on the home loan are permissible and that any additional fees do not exceed the applicable rate threshold outlined above. Please note that there are no such fee limitations for loans over $300,000 (N.C. Gen. Stat. § 24-8(a)).

Please feel free to contact DocMagic's Compliance Department if you have any questions or comments regarding this audit.