Home builders and real estate brokers are concerned that new rules from the Consumer Financial Protection Bureau will hinder their in-house mortgage services operations. Under the rules, fees and points charged by lenders are capped at 3 percent of the loan amount; and the provision applies to fees for title searches, inspections, settlement services, and other closing costs when the service provider is the same as or owned by the mortgage originator. Home builders and property brokers expect their mortgage units to lose business to other third-party service-providers, but consumer advocates applaud the rules for encouraging home buyers to shop around. They have long argued that builders' in-house mortgage services units are anti-competitive. "In these transactions, the consumer is effectively at the mercy of the creditor who is putting together all the paperwork," explains Barry Zigas of the Consumer Federation of America. "The opportunity for inflating costs and charging above market rates in a way that's not transparent is a bad practice."
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