Consumer complaint received 2023-09-19 00:00:00
Product: Mortgage — FHA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — Fees or costs during the application process
Company: LAKEVIEW LOAN SERVICING, LLC
State: CO

Complaint narrative:
My husband and I are in the process of assuming a mortgage loan owned by Lakeview. The loan is currently under my husband and grandfather-in law. I am assuming the grandfather 's position on the loan. 

I am concerned with two of the fees Lakeview is charging at time of closing. 

I have reviewed FHA  Mortgagee Letter 2016-24, which states the following : " Processing Fee and Other Costs ( II.A.8.n.vi ( A ) ) Mortgagees may charge the assuming Borrower a processing fee that is reasonable and customary not to exceed a maximum of {$900.00}. The Mortgagee may charge the assuming Borrower other costs in accordance with Allowable Charges Separate from Assumption Processing Fees. 

Allowable Charges Separate from Assumption Processing Fees ( III.A.3.b.ili ( A ) ) The Mortgagee may charge the assuming Borrower reasonable and customary fees not to exceed the actual costs for third party expenses incurred in connection with assumption processing : non-refundable fees for credit reports and verifications of employment ; and up to {$45.00} for fees for the preparation and execution of release of liability forms ( form HUD 92210.1, Approval of Purchaser and Release of Seller ), where a Borrower requests an executed release of liability form as evidence that the Borrower was released during a previous creditworthiness review. '' I have also reviewed the HUD handbook Section III.A.1.f. Servicing Fees and Charges which states the following ( asterisks added to the relevant portion ) : ( ii. ) ( C ) Prohibited Fees and Charges The Mortgagee must not charge the Borrower for the following services : costs of telephone calls, telegrams, personal visits with the Borrower, certified mail, or other activities that are normally considered a part of a prudent Mortgagees servicing activity ; ****Mortgagees use of an independent contractor such as a tax service to furnish tax data and information necessary to pay property taxes or make the payments on behalf of the Mortgagee ; **** preparing and providing evidence of Payoff, Reconveyance, or termination of the Mortgage ; providing information essential to the Payoff ; recording the Payoff of the Mortgage in states where recordation is the responsibility of the Mortgagee ; or fees for services performed by attorneys or trustees who are salaried members of the Mortgagees staff. 

Lakeview 's loan estimates include a {$200.00} " attorney review fee '' and a {$75.00} " tax service '' fee. I inquired about these fees with our loan processor, XXXX XXXX, and received the following response : " The {$200.00} attorney fee is paid to XXXX XXXX. This is the law firm that prepares the Assumption Agreement document. This is their standard fee and is charged on all Assumption loans. The tax service fee is payable to XXXX XXXX, the title company. All fees disclosed on the final Closing Disclosure are allowable charges for Assumption loans. '' Based upon my review of the FHA regulations, I do not believe these fees are " allowable charges. '' Lakeview charges a {$900.00} assumption fee. I believe the " attorney review and tax service are a cost of doing business and therefore the {$900.00} fee authorized by FHA regulation is inclusive of those services. The only fees they are allowed to charge are for, above the {$900.00} assumption fee, is for credit reports/verification of employment and release of liability. 

I would also note that I do not see that an attorney review is required anywhere under the FHA regulations, and I take issue with the fact that if this is mandatory we can not chose the attorney. I also just don't think it makes any sense, as the assumption paperwork, deed, etc. are all boilerplate documents attorneys typically have no involvement in a closing or purchase. 

With regard to the " tax service '' fee, all three of us are on the title currently. The taxes have been paid-up. Our escrow amounts are correct. What service is the tax service providing? There are zero taxes due.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation