"What did I sign, anyway?"

Staring down a stack of densely worded loan documents can be one of life's scariest, and sometimes most baffling, moments.

And when mortgage-broker fees take a dramatic upward swing at the end of the transaction, it's often hard to figure out what happened or why. "It's like being sick but not knowing why you're sick. You only know something is wrong, but you are not sure what it is," says Sean Moore, a 29-year-old financial adviser from Seattle who still wonders what happened with his first home loan from five years ago.

It wasn't until months after closing on his first loan that Moore wondered: "What did I sign, anyway?"

He wondered if he got the most competitive rate and if the broker had been on his side.

Four months ago, when Moore needed to finance his next home, he did some research and found a mortgage broker who provided a fixed fee upfront and who would reveal the wholesale loan amounts to him. That fee was guaranteed not to change during the loan process.

Moore had found an "Upfront Mortgage Broker." (Saint Lawrence Mortgage!)

More than 120 brokers belong to the nonprofit Upfront Mortgage Brokers Association, founded in January 2006. Washington state has two brokers doing business as Upfront brokers (or UMBs, as they are called) and 15 applications pending with the association.

The idea comes from syndicated columnist and "mortgage professor" Jack Guttentag (his column runs in this section), a retired business professor and mortgage expert who wants customers to have more information during the loan process.

Customers are confused, Guttentag says.

The association focuses on just one dimension of the broker-client relationship: the broker's fee.

"It's better," Guttentag says, "to get the fee out in the open and have it agreed upon in advance like you would with an architect or any other service provider."

Guttentag is concerned about things like the "good-faith estimate," which is merely an "estimated" cost of the loan.

It seems to him that many brokers have been doing a "bait and switch," luring customers with low rates and fees, then increasing those costs near the closing date.

A conventional broker's fee can go up as long as the customer is notified within three days of signing, but an Upfront broker's fee remains fixed throughout the process.

The fee is agreed to upfront and a statement of commitment is signed.

"We now have a commitment from loan officers that is all about transparency. The more transparent the process, the more people will be able to make informed decisions," says Steve Heideman, president of the Upfront Mortgage Brokers Association.

He thinks the openness fosters trust and helps customers feel they can discuss a variety of loan programs.

But most Washington brokers may already be operating in an "upfront" way.

A new state law that took effect at the beginning of the year, requires the state's 10,000 loan originators, also called loan officers, to become licensed and pass a background and competency test. "If you are in compliance with Washington state law, well then you are an upfront mortgage broker," says Adam Stein, president of the Washington Association of Mortgage Brokers. He estimates that probably less than 1 percent of Washington brokers are engaging in unethical practices.

"Yet if you get to closing and all of a sudden find increased fees that benefit the broker or lender and there is no tangible reason for it, by all means contact the Department of Financial Institutions," Stein says. "We want to hear from you."

Last year, 209 complaints about mortgage brokers were filed with the state Attorney General's Office.

The three biggest red flags to watch for: lack of a disclosure (the good-faith estimate), a request to sign blank documents, or discovery at closing that the good-faith estimate is nothing like what you thought it would be.

Michael Sanborn, an Upfront mortgage broker who charges a flat fee, worked for years as a loan underwriter and noticed that many brokers didn't seem to understand all the loan options themselves.

He also worried about the fees being charged to customers. "There was too much confusion and not enough information," Sanborn says.

Sanborn agrees that the new licensing law will help increase customer confidence, but he remains concerned that customers must already understand how interest-rate-pricing works or find someone willing to sit down and explain it.

Having all the information upfront and knowing what fees are set can help customers feel more in control of the process, Sanborn says. But when customers sense that something isn't right, they don't always know where to go for more information.

"The problem is that the vast majority of people will not complain to the Department of Financial Institutions," Sanborn says. "They will simply not use the company again, or become bitter and jaded."

Julie, a 33-year-old writer, bought a house in Seattle last month and says she and her husband felt pressure from a broker recommended by their real-estate agent. After she asked about a variety of loans, the broker copied down her personal information and began insisting she pursue an interest-only loan.

Before she agreed to any fees, the broker scheduled an appraisal and started work on a loan she didn't want.

Her concerns grew when she told the broker she did not want to use him and he got angry. Later she received a loan document in the mail from an unfamiliar bank, which confirmed to her that the broker was working more for himself than for her. She wondered about his fees and if she was now obligated to work with him.

"It all happened so fast," she says, "and we didn't know enough about the process to know what we should do. Was what we experienced illegal? We just don't know. We just know that the whole thing made us feel ill at ease."

Upfront brokers say that for the uninformed, confusion and fear are typical emotions associated with the loan process.

"Fear of the unknown ended up costing me a place," says Paul Arrington, who was working as an airline pilot in 2000 and had his eye on a town house in Southern California. He had a down payment ready to go.

After consulting with a mortgage broker who he says didn't explain the process very well, he stalled. He wasn't sure the broker was being straight with him, and he did not fully understand the process.

"I was just afraid and I didn't know what I was getting myself into, and I didn't have any support."

After he lost the town house, which he says has since appreciated by $450,000, Arrington learned the business for himself and became a loan officer.

There is so much information out there, and you really have to take time to go over it with people, Arrington says. "And it shouldn't be that on the last day before closing you find out that there is a change."

Jeff Rafuse became an Upfront broker after reading articles by Guttentag.

"Most people signing all the paperwork just want to get it over with and go home. It's such a stressful process," Rafuse says. "The Upfront broker program helps build trust and allows clients to know what is going to happen ahead of time. That helps."