Can my mortgage servicer charge me undisclosed fees?

What the Law Says

The Real Estate Settlement Procedures Act (RESPA) is a federal consumer protection law designed to ensure transparency in real estate transactions, especially regarding mortgage servicing and settlement costs.

RESPA prohibits lenders and servicers from charging borrowers fees that were not clearly disclosed in advance. The law mandates that consumers receive timely, accurate information about all settlement costs so they can make informed decisions.

While 12 U.S.C. § 2601 itself states Congress’s findings and purpose—not specific prohibitions—the statutory framework it establishes under RESPA (including §§ 2603–2617) imposes binding disclosure requirements, including the Good Faith Estimate (GFE) and Closing Disclosure, which collectively bar undisclosed or 'junk' fees.

Statutory Text

The Congress finds that significant reforms in the real estate settlement process are needed to eliminate abusive practices in the real estate settlement process.

— 12 U.S.C. § 2601 — Congressional findings and purpose

Statutory Text

The purpose of this chapter is to provide home buyers and sellers with greater and more timely information on the nature and costs of the settlement process and to eliminate abusive practices.

— 12 U.S.C. § 2601 — Congressional findings and purpose

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