By the Division of Banks

Attorney's Fees Relating To A Mortgage Closing Included In The APR Calculation

It has been the consistent position of the Division of Banks that bona fide and reasonable attorney's fees, as listed in 209 CMR 32.04(3)(g) 1-5, specifically are excluded from the finance charge, and therefore from the calculation of the annual percentage rate (APR) for a residential mortgage loan. In addition, federal Regulation Z contains the same exclusion of attorney's fees in section 226.4(c)(7). In the event that an attorney charges a fee for a service which is not excluded by this section, then the amount of the fee would be considered a finance charge and would be included in the APR.