Providing small loans at affordable prices has always been a challenge. The core problem is that the cost of originating and servicing a loan is much the same for a small loan as for a large one but the interest return, based on the loan amount, is smaller on the smaller loan. The obvious remedy, a higher interest rate on the...

With one important exception, lenders price loans on the assumption that borrowers will include taxes and insurance premiums in their monthly mortgage payments. These payments are placed in an escrow account under the lender's control. On a payment date, the amount due is paid by the lender.

The escrow requirement protects...

Borrowers who don't know how to deal with mortgage brokers waste their own time as well as that of the brokers. Borrower ignorance also encourages brokers to be hustlers rather than professionals.

In general, borrowers should view brokers as providers of professional services for which they are paid a fee. That fee is the only price ...

There is much to admire in Bank of America's new No Fee Mortgage Plus (NFMP) program for home purchasers. NFMP collapses all lender fees into one combination of interest rate and points, eliminating the myriad of separate lender "junk fees" that confuse shoppers. Junk fees are also a source of abuse by less scrupulous lenders who may raise...