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So I whittled down my house note to the point where I have enough cash to just pay it off early and be done with it. Yay!

I asked my lender for a "payoff" statement, which provides an accounting of how much I would owe including last minute interest accruals as of the day I intend to make the last payment.

To my surprise there is a $16 "Recording Fee". Okay, it is not much money, but I don't remember agreeing to any such thing. In fact the loan documents (with another bank originally) specifically said there was no prepayment penalty on the loan. I feel like they are just sneaking in something they have no right to.

Questions:
1) What is a recording fee exactly? Is that a normal thing for home loan payoffs?
2) Are they just calling it a fee instead of a prepayment penalty to jump through a loophole and stick it to me anyway?
3) Would I likely have had to pay this when I made my last payment anyway or does this have something to do with the fact that I am paying it off early?

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4
  • Definitely a big: YAY!
    – Peter K.
    Commented May 28, 2011 at 18:28
  • Dig out your HUD-1 from closing: my recording fee was collected as a closing cost. I am looking forward to cursing out a bank officer if they try to collect it twice.
    – user662852
    Commented Jul 31, 2015 at 22:47
  • @user662852 Oooooh I would love to be a fly on the wall when you cuss out the bank officer. The recording fee at closing was paid to record the mortgage on the land records of the property, indicating that the bank had an interest in the property and that you (or anyone else) could not sell the property without paying off the mortgage or asking the bank to transfer the mortgage to the new buyer. The recording fee when the loan is paid off is to remove the mortgage from the public record. If you don't want to pay now, pay when you sell (and hope that the bank still exists to do it then).
    – Dilip Sarwate
    Commented Aug 2, 2015 at 14:38
  • I might well take the attitude with the bank of pound sand. By the time I would need to sell again, the debt would have lapsed if they even did try to assert it again.
    – Joshua
    Commented Nov 16, 2015 at 17:46

1 Answer 1

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26

Your county wants the fee to record your newly owned house into the public record.

Congratulations on the new wave of junk mail you are going to get =)

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  • 1
    Wait, another round? I got all that when I OPENED the mortgage!
    – JohnFx ♦
    Commented May 28, 2011 at 1:24
  • 5
    @JohnFx: Oh yeah ... now that you own your home free and clear, you're in a great position to borrow against it again! ;)
    – mbhunter
    Commented May 28, 2011 at 1:41
  • 6
    Plus chances are you will need your car windshield replaced and your chimney swept.
    – MrChrister
    Commented May 28, 2011 at 1:42
  • 2
    Yes, it's just a pass-on from the local authority via the bank. The bank really doesn't have any choice.
    – Peter K.
    Commented May 28, 2011 at 18:30
  • 1
    @mbhunter Fat chance. I just paid off my home equity loan too (pool loan) and I'm not climbing THAT hill again. =)
    – JohnFx ♦
    Commented May 29, 2011 at 14:08

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