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  • Writer's pictureJeff Sorg

CFPB Report Findings: Mortgage Servicers Forced Homeowners to Pay for Prohibited or Unauthorized Fees and Services.

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Did you know your mortgage servicer, the company that handles your monthly payments, might be ripping you off by charging illegal fees? The Consumer Financial Protection Bureau (CFPB) recently found mortgage servicers:

  • Charging sneaky fees: This includes things like hidden property inspection fees that aren’t supposed to be charged and late fees higher than allowed by your loan agreement. Make sure you understand all the charges on your statement.

  • Not helping during COVID-19: Some servicers didn't waive late fees or penalties for struggling homeowners during the pandemic, even though they were supposed to.

  • Missing tax and insurance payments: If you pay your servicer for property tax or homeowners insurance, they might delay the payment, causing penalties for you.

  • Confusing homeowners about help options: Some servicers sent misleading notices saying borrowers were approved for help when they weren't or falsely claimed missed payments. They might also make it hard to get the help you deserve.


The good news is that the CFPB is cracking down on these practices. Mortgage servicers are now supposed to fix their mistakes and give refunds for illegal fees.


The CFPB has also announced that it is working to address other anticompetitive mortgage fees, including those charged in connection with closing costs. “Homeowners cannot simply switch providers if their mortgage servicer charges them illegal junk fees," said CFPB Director Rohit Chopra. "Since mortgage borrowers are captive to a company they never chose to do business with, we are working hard to detect and deter violations of the law.”


Here's what you can do:

  • Review your mortgage statements carefully.

  • If you see a suspicious fee, ask your servicer for clarification.

  • If you're struggling to make payments, reach out to your servicer and ask about available options.

  • You can also file a complaint with the CFPB if you believe you've been mistreated.


For more information:

  • Read the CFPB report.

  • Submit a complaint about your loan servicer by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).

  • Loan servicer employees who they believe their company violates financial protection laws can turn in their employer by sending information about what they know to whistleblower@cfpb.gov


END

(C) 2024 Jeff Sorg

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