MARKED UP SETTLEMENT CHARGES

Buying and financing a home is typically a consumer's largest and most complex financial transaction. The complexity of the transaction, coupled with the infrequency of the average homeowner's experience with mortgage transactions, makes consumers especially vulnerable to being overcharged for loan origination services and settlement costs.

Lenders and settlement agents often secretly inflate and mark-up third parties' charges for items like courier services, appraisals, credit reports and flood certification reports so they can reap additional profits from unsuspecting borrowers. Since the mark-ups are undisclosed, it is difficult for consumers to prevent these overcharges before they are paid at the loan closing.

The Minnesota Attorney General has determined that the secret markup of third party charges violate Minnesota consumer protection laws. In relation to one case, the Minnesota Attorney General stated:

In this case, our investigation revealed a practice of charging some customers more than the company actually paid for appraisals, credit reports, flood certifications and delivery services. This type of practice, which I believe is common in this industry, is simply not acceptable....Buying a house is one of the most confusing and intimidating experiences most consumers will ever go through....With all the paperwork and forms, it is relatively simple for a mortgage broker to mark up fees. Even the most sophisticated consumers have no way of knowing if they are being overcharged for appraisals and other services.

Zimmerman Reed P.L.L.P. currently represents homeowners in certified class actions challenging lenders and title companies’ practices of marking up third parties' fees. If you recently obtained a mortgage loan, or refinanced, you may have been overcharged. If you would like us to investigate your possible claim for a refund, please contact J. Gordon Rudd at 1.800.755.0098 or Hart Robinovitch at 1.800.493.2827.