Closing Costs Are a Garbage Heap of Junk Fees

Time marches quickly, and the youngest members of the workforce, most of whom live paycheck to paycheck even if they have a salaried position, hardly remember the housing market crisis of 2008 and the response that followed.  The Occupy Wall Street movement of 2012 left two important effects, namely the formation of the Consumer Financial Protection Bureau (CFPB), and the phrase “the 99 percent” to refer to everyone except the wealthiest one percent of people.  One of the CFPB’s perennial targets has been “junk fees,” which are fees that companies charge just because they can, even though the service you get, if any, in exchange for these fees is of limited benefit to the consumer.  When you think about it, junk fees are everywhere, from overdraft fees to cancellation fees to those nebulous “processing fees” that places seem to charge.  If it is any consolation, junk fees are somewhat less prevalent than they were a decade ago, but they are still around, and in the rare event that you can afford to buy a house, you will find an astounding number of them at closing.  If you are still reeling financially after paying a mountain of junk fees at mortgage closing, contact a Miami debt lawyer.

Beware of the Big Five Junk Fees at Closing

When you close on a house, you must sign a volume of documents at closing.  One of them itemizes all the fees that the buyer and the seller must pay, and sometimes there are well over 100 fees.  These are the top five fees that the CFPB has identified as junk fees, meaning that they are entirely unnecessary, or else they are excessively costly:

• Buydown fees – These are also known as discount points or mortgage points. You pay the lender a lump sum, not counted as part of your down payment, in exchange for a lower interest rate.  It would be better if the lender gave you a lower interest rate from the outset and let you put the extra money toward paying down the principal.
• Credit report fees – Paying another $50 for another credit report just before closing only adds insult to injury.
• Property appraisal fees – Getting an appraisal of the property during the sale process makes sense, but paying a huge amount for it just before closing does not.
• Title insurance – Title insurance, which pays the buyer’s legal fees in the event of a dispute over the title to the property, is legally required in some real estate transactions. Even though the premium is a one-time payment, it is often overpriced.
• Mortgage origination fee – This is a fee the buyer pays to the lender at closing, and it can be as high as one percent of the mortgage principal.

Work With a Debt Lawyer About Bouncing Back After Closing

A South Florida debt lawyer can help you if your debts are getting out of control shortly after you closed on a house.  Contact Nowack & Olson, PLLC in Miami, Florida to discuss your case.

Source:

cbsnews.com/news/mortgage-junk-fees-cbs-news-explains/