Obtaining a mortgage should be a transparent process without hidden fees, which is why a coalition of attorneys general is urging the Consumer Financial Protection Bureau (CFPB) to prohibit mortgage servicers from charging convenience fees.
Hawaii Attorney General Holly Shikada is part of the coalition of 22 attorneys general who believe charging convenience fees is one of the more exploitative “pay to play” fees that consumers endure.
According to Gov. David Ige's (D-HI) website, the CFPB had requested information about fees consumers are faced with in the financial marketplace. Illinois Attorney General Kwame Raoul spearheaded the coalition that urged the CFPB to evaluate convenience fees in the mortgage industry, arguing they are “unfair and abusive,” leaving homeowners with no choice in their mortgage services.
“The process of obtaining and paying for a mortgage should be transparent and fair, and homeowners should not be subject to a myriad of hidden fees that they only learn of after committing to a product or service,” Shikada said, according to the governor's website. “Navigating this process is daunting enough without the fear of being taken advantage of by these often inappropriate and unnecessary fees.”
The letter said the CFPB’s evaluation of discretionary fees charged by servicers is warranted due to the duration of mortgage loans, coupled with consumers’ lack of servicer choice and the fact that some servicers have attempted to impose convenience fees, even when they are not authorized by the original loan documents.
Joining Raoul and Shikada in sending the letter are the attorneys general of 20 other states, as well as the Hawaii Office of Consumer Protection.