What must lenders and brokers provide to borrowers before accepting fees?

Lenders and brokers are required to provide written disclosure of fees to borrowers before accepting any fees. This requirement is rooted in the principle of transparency in the lending process, ensuring that borrowers are fully informed about the costs associated with their mortgage before committing to any financial obligation. The written disclosure serves to protect consumers by outlining all fees in a clear and unambiguous manner, preventing misunderstandings and fostering trust between the borrower and the lender or broker.

Providing a written disclosure is a proactive way to ensure that borrowers have the information necessary to make informed decisions regarding their mortgage options. It not only includes the fees that may apply but also helps set clear expectations regarding the loan process. This written standard is particularly important in the context of compliance with various regulations that govern mortgage lending, which emphasize the need for clear communication.

While oral or verbal confirmations could convey similar information, they do not provide the same legal protection or clarity that a written document affords. Also, simply offering a fee schedule upon request does not meet the requirement, as it lacks the proactive disclosure needed before fees are accepted.