Finance
The 'loan origination fee' charged by a mortgage lender represents:
AA fee for appraising the property
BCompensation to the lender for processing and underwriting the loan✓ Correct
CPrepaid interest to reduce the interest rate
DThe fee paid to the title company at closing
Explanation
A loan origination fee (sometimes called an origination charge) is compensation paid to the lender for originating (processing, underwriting, and making) the loan. It is usually expressed as a percentage of the loan amount (points) and is paid at closing. It is distinct from discount points, which are paid to reduce the interest rate.
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