Consequences of CFPB’s actions
However, Peter Idziak, a senior associate at mortgage law firm Polunsky Beitel Green, argued the probe ignores the role of increasing government regulations in driving up costs.
“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.’ 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,” Idziak said. “Any inquiry into increasing closing costs that fails to consider the regulatory burden lenders face will fail to fully address the issue.”
The agency has launched a public inquiry that aims to determine who benefits from rising closing costs and how they could potentially be lowered. According to the CFPB, median closing costs reached $6,000 in 2022 and can quickly erode home equity and undercut homeownership goals. Lenders also pay a price through higher expenses like credit report fees.
But Idziak insisted lenders have little incentive to arbitrarily inflate charges in today’s highly competitive mortgage market.
“We don’t see unnecessary fees being charged to borrowers in the origination space,” he said. “The market is extremely competitive right now, with lots of lenders chasing fewer eligible borrowers.
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