More Banks Could Face Scrutiny Over Foreclosure Billing Practices

August 28, 2013
American Banker  
mortgage lending news

Federal and state regulators are more closely scrutinizing the practice of padding foreclosure expenses, warning mortgage servicers that they are liable for ensuring that fees charged by lawyers and third-party vendors are reasonable and accurate.

Two major servicers have already received subpoenas related to vendors' billing practices, and insiders say the Consumer Financial Protection Bureau is about to subpoena others to find out if borrowers in foreclosure are being overcharged or paying for services never rendered. Some of these charges billed to borrowers in foreclosure include posting a legal notice in a newspaper, preparing documents, and recording a foreclosure at a county recorder's office.

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