Before the CFPB was granted authority over RESPA, HUD was the regulator in charge. During HUD’s reign, a variety of class action suits were filed under RESPA where the plaintiffs alleged they were overcharged for third-party fees. In some instances, a settlement service provider cannot determine the actual fee for a service at the time the lender or broker is required to disclose the fees to the consumer. Because of this the providers were sometimes charging too much or too little for a third-party service.
For example, let’s say a title agent assumed that a mortgage document will be comprised of 12 pages, and that the recording costs to the consumer will be $2 per page. The total the agent charged the consumer to record the mortgage was $24. Then, it turns out that the mortgage was only 10 pages and only cost $20 to record. The title agent charged the consumer an extra $4.
This type of scenario led to class action suits because consumers believed the title agent violated RESPA by charging a fee that exceeded the cost of the actual service.
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