CFPB opens public inquiry into rising mortgage closing costs

The Consumer Financial Protection Bureau today launched a public inquiry into “junk fees that are increasing mortgage closing costs.” The CFPB “wants to understand why closing costs are increasing, who is benefiting, and how costs for borrowers and lenders could be lowered.” According to a CFPB analysis, the closing costs borrowers pay in connection with a mortgage have “risen steeply” in recent years. “From 2021 to 2023, median total loan costs for home mortgages increased by over 36%. The unavoidable fees borrowers must pay at closing can strain household budgets and families’ ability to afford a down payment. The fees may also limit the ability of lenders to offer competitive mortgages because they have to absorb the higher costs or pass them on to borrowers,” the agency said in a statement. Companies involved in mortgage closings include Fidelity National (FNF), First American (FAF), Rocket Companies (RKT), UWM Holdings (UWMC) and Mr. Cooper (COOP).