The CFPB requires that lenders provide customers with a Loan Estimate to help them understand the full cost of buying a home with a mortgage.
[3] The Loan Estimate covers all the costs associated with buying a home, even if they are not related to the actual mortgage.
This makes it easier to compare the charges a loan applicant receives on the good faith estimate to the HUD-1.
Brokers can also earn a “rebate” from the lender which is not listed here Lender fee, usually small, for handling tax related matters This is the charge for processing the loan – collecting the buyer's application, running credit, collecting pay stubs, bank statements, ordering appraisal, title, etc.
By law, the lender is not allowed to collect more than the sum of initial payments for reserve items.
The aggregate adjustment is the amount the lender must 'credit' the borrower at closing, so that they don't collect more than the law allows.
Lenders often email the loan documents to the escrow company, which in turn prints them out and reviews them before signing.
However, some title companies are owned by an attorney who will also draw certain legal documents for the buyer's closing.
If there is a question about title (who really owned the property), or if a judgment or lien was really paid off, after the transaction is done then this insurance protects the lender and owner from future problems.