Are banks trying to discourage concerned borrowers from taking action?
In light of the allegations against shoddy verification practices in the foreclosure process, most of the large banks have halted foreclosures in some or all of the 50 states. The biggest reaction so far has come from Bank of America, which has suspended foreclosures in all 50 states pending review of its process.
I’ve suggested a few times in the last couple of weeks that this might be a good time for borrowers to ask their bank to prove they actually have the proper documentation that says they own the loan or have sufficient authority over it to do anything significant, like foreclose. Believe it or not, there have been a good number of cases where the courts have not only found that banks didn’t have the proper documentation (like when they can’t find the trust deed), but the judges went further and dismissed all the debt.
Apparently banks are well aware of the possibility that large numbers of people make take this opportunity to ask them to verify their mortgage, if the recent fee notice from Bank of America is any indication.
Fee Notice Information
Fees for Special Services and Paying Off Your Home Loan
Generally, there are no fees for the routine servicing of your loan. The following fees are the maximum fees that may apply if you request certain special services regarding your mortgage or home equity loan:
Verification of mortgage $15.00
Faxing a payoff statement (FHA only) $ 5.00*
Expediting a payoff statement $30.00*
“”There is no charge for mailing the payoff statement by regular U. S. mail.
If you payoff or refinance your loan, you may incur a fee for the preparation of the documents to release or reconvey your lien (up to $45). Reconveyance is a release of your mortgage when the security instrument on your loan is a deed of trust.
You may also incur a fee to record this reconveyance or release document (in the amount of the actual fee charged by the county recorder, normally not more than $100). In addition, if you have a home equity line of credit (HELOC) that is subject to an early closure fee, you may be charged an early closure fee as described in your HELOC Agreement.
There is also a returned payment fee of up to $40.00.
If you request information or services that incur a fee not listed above, Bank of America will inform you of the fee prior to
processing your request. However, in the event of a returned payment, fees will automatically be applied to your loan account. The information above is not a complete list of the types or amount of fees that could be charged to you over the life of your loan, and the amount of any fee shown above is subject to change.
I think part of the motivation for these fees is to make up for the recent fee haircut banks received from the Credit Card Act of 2009, but I find the fee for verification of mortgage particularly timely. Could BofA be trying to discourage people from challenging their loan.
Charging for the documentation to prove that you have paid off your loan is also very timely. There have been some high profile cases where banks have hounded people for mortgage payments long after their mortgage was actually paid off in full and perhaps as a result banks like BofA are getting hit with a lot of requests for documentation to prove a loan is paid off, which they should be providing for free.
BofA, I am happy with you for now; I sure hope this doesn’t mean you are a becoming a crappy, fee hungry bank like Chase.
Fees & charges | admin October 14, 2010
