Weichart, a national mortgage company, has recently settled a lawsuit filed by several Pennsylvania homeowners that accuse the company of defrauding them. In the real estate industry, most people assume that the closing costs they are charged are valid. In Weichart’s case, an additional closing cost fee that added up to only a few hundred dollars, but the mortgage company was unable to prove that it performed any additional services.
While Weichart has agreed to reimburse over 8,000 homeowners for bunk closing cost fees, lawyers still claim that the company did nothing wrong. The ruling in this class action lawsuit may have a major impact on the mortgage industry. With some home shoppers opting to do their own title searches and performing other duties normally reserved for real estate professionals, consumers are becoming much more savvy about the mortgage process. In an effort to save money, home buyers are reading their contracts in their entirety instead of just taking the word of their lawyers.
Both sellers and buyers can be charged closing fees. While the costs normally do not exceed $500, mortgage companies are permitted to charge any amount that they want to. Closing fees are usually calculated according to the total price of the property being sold. Weichart will be required to pay $525,000 and claimants will need to file the necessary paperwork by the beginning of September in order to get their fees reimbursed. Sellers and buyers in other states that have done business with Weichart may end up filing against the company to get their excessive closing fees back.
