NEW YORK (8/13/14)--Consumers are paying higher fees related to closing costs for the second straight year, a closing cost survey from Bankrate.com has found. Some credit unions, though, are trying to keep those costs down.
U.S. homeowners in the past year who secured a $200,000 mortgage paid an average of $2,539 in lender and third-party fees, such as appraisal services, the survey found--a number that sits 5.7% higher year-over-year.
Origination fees, which get paid directly to the lender, leapt 8.5%.
Texas recorded the most expensive closing costs at an average of $3,046 on a $200,000 mortgage, with Alaska and New York not far behind at second and third in the nation.
In the wake of the housing crash, the Federal government has ramped up regulations pertaining to lending practices, many of which at banks came under much scrutiny in the years following the downturn.
The development, which produced the qualified mortgage (QM) rule that essentially requires lenders to ensure the people they lend to can actually pay back the loans, could be driving closing costs higher.
But not all institutions have been inflating their charges.
SEFCU, Albany, N.Y., with $2.8 billion in assets, hasn't increased its fees in more than four years despite more stringent regulations, not to mention weaker revenue, Bob MacLasco, SEFCU mortgage services president, told the Albany Business Review (Aug. 6).
"It's been building over the past few years," MacLasco said. "We just chose not to pass that on to the borrower."
According to a recent survey by the Credit Union National Association, 17% of respondents said the new QM rule had driven down the number of first-mortgage loans their credit union is making (News Now Aug. 7).
Further, 7% said the rule has had a strong negative impact, 27% said it has had a moderate negative impact, and 34% said it has had a minimal negative impact on the ability for credit unions members to secure a first mortgage.