All Forum Posts by: Reggie Smith

Borrower signed a standard Loan Services Agreement.  Broker prepared a term sheet.  Borrower ended up going to a bank for the mortgage.  Broker did not connect the borrower with the bank. Is borrower still responsible for the 1% fee?

Here is what I believe is the relevant provision.

The Agent (broker) will underwrite, package, and submit the Client’s loan to lenders, with the intent of procuring a term sheet on behalf of the Client. The Client has the right and is encouraged to close the deal directly with the lender introduced by the Agent. In consideration of services rendered, the Client agrees to pay the Agent in the amount of 2% of the gross loan amount (the “Fee”) to the Agent upon the Client’s execution of this Agreement and paid via ACH or wire pursuant to forms executed by the Client.