The Consumer Finance Protection Bureau (CFPB) issued a press release on May 30 detailing the beginning of its investigations into junk fees contributing to rising mortgage closing costs. The investigation seeks to understand why these costs are rising, who they benefit, and ways to lower these costs for the public. Following the CFPB’s announcement, Peter Idziak told reporters that the CFPB’s investigations should begin with a hard look in the mirror.
“A more accurate title of the CFPB’s press release could be, ‘Well, Well, Well, if it isn’t the Consequences of My Own Actions,’” Idziak said. “Completely absent from the Bureau’s Request for Information is any acknowledgment that increasing and overburdensome government regulations and actions by FHFA as conservator of Fannie and Freddie have increased costs of doing business substantially for lenders, which are in turn passed on to consumers through higher origination fees. Any inquiry into increasing closing costs that fails to consider the regulatory burden lenders face will fail to fully address the issue.”
Idziak added, “We don’t see unnecessary fees being charged to borrowers in the origination space. The market is extremely competitive right now, with lots of lenders chasing fewer eligible borrowers. There’s simply no incentive for lenders to inflate their fees and price themselves out of the market. Lenders are also prohibited from inflating or up charging borrowers for the costs of a third-party service, so any increases in third-party fees are driven by the vendors themselves. Lenders share the Bureau’s concern with the rising costs of credit reports and homeowners’ insurance and hope that the request for information could eventually lead to lower costs for these services.”
Idziak’s commentary was included in the following media coverage:
- Law360: CFPB To Probe ‘Junk Fees’ In Mortgage Closing Costs
- National Mortgage News: CFPB launches mortgage closing costs inquiry
- Mortgage Professional America: Mortgage industry: CFPB ignores its own role in junk fees