New York requires mortgagees to reimburse mortgagors charged for mortgage property registration fees

New York: The New York State Department of Financial Services (DFS) has found some mortgagees to be in violation of the law, by passing property registration fees on to mortgagors.


Per a Sep. 1 notice posted to the DFS website, directed to mortgage lenders and servicers regulated in New York:


“Section 419.5 of the Superintendent Regulations (3 NYCRR Part 419), only permits Mortgagees to collect certain specified types of fees from a mortgagor, consisting of attorney’s fees, late and delinquency fees, property valuation fees, and fees for services actually rendered to a mortgagor when such fees are reasonably related to the cost of rendering the service to the borrower.  A Registration Fee is neither an attorney fee, late or delinquency fee, property valuation fee, or fee for a service rendered to a mortgagor. Therefore, a Registration Fee may not be charged to, or collected from, a mortgagor under Part 419.”


The enforcement of that Section require all mortgagees immediately begin to reimburse to all mortgagors the full amount charged to the mortgagor for any registration fees involved in mortgage registration requirements from counties, cities, or municipalities; that applies for any such fee costs passed on to mortgagors at any point in the past.


Mortgagees must also have a full, detailed, log of all such charges and proof of reimbursement to mortgagors prepared for DFS to review when DFS next has a review of the given mortgagee.




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