Financial reform was touted as a way to further protect consumers but it appears that those protections are coming through as increased costs for mortgage transactions. According to Bankrate’s 2010 Closing Cost Survey, closing costs are on the rise. The study found the average origination and title fees on a $200,000 mortgage in 2010 totaled $3,741, up 36.6 percent from $2,739 in 2009. The state with the highest fees in the nation was New York with average costs of $5,623. Some lenders attribute the increased costs due to increased labor requirements for regulatory compliance because closing costs at the time of application must be more accurate or they risk being penalized.
The survey analyzed lenders’ origination fees and title and settlement fees, but did not include taxes or prepaid items. The analysis was based upon fees for a 30 year fixed-rate mortgage for borrowers with a 20 percent down payment and good credit to buy a single-family home.
