In the event of a default on a mortgage, homeowners/borrowers are typically required to pay the lender's fees/costs associated with an underyling foreclosure. Usually the servicer will add these expenses to the total loan balance in the foreclosure case.

Why are lenders able to charge additional fees?

Typical mortgage contracts allow the lender to charge late fees, foreclosure costs, inspection fees, and other costs to a homeowner's account.

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What are the typical foreclosure costs?

Foreclosure costs may include the following:

• court filing fees
• title costs
• recording fees
• service of process fees
• mailing costs
• sheriff's fees, and
• publishing and posting costs.

In general, the foreclosure costs incurred must be reasonable before they're recoverable against the homeowner/borrower. The loan servicer may even order property inspections to ensure that the property is occupied and well-maintained. The servicer may be able to add the inspection charges to the total mortgage debt.

What are BPO charges?

"Broker's price opinions" (BPOs) are property valuations that are performed after a borrower defaults. The valuation can be based on public data, exterior examinations, and comparable sales. BPOs are typically less expensive than appraisals, and are used by loan services to evaluate the condition of the property. Homeowners may be resposible for the cost of these BPOs.

Can the Lender Charge the Homeowner the Cost of Maintaining the Property?

Loan servicers typically have discretion to charge the homeowner for maintenance of the property, for example

• lawn care/snow removal
• repairing damage
• winterizing, and
• removal of trash/abandoned property.

To be collectable from the borrower, the property maintenance charges must be actually incurred and necessary to preserve the property's value.

What are some additional costs that can be charged?

If the homeowner fails to maintain continuous insurance coverage on the property, the lender may purchase insurance and charge it to the borrower's account. This is called "forced-placed" insurance.

If the homeowners files for bankruptcy, the lender may have the right to recover the cost of its attorneys fees in the bankruptcy process.

A lender might also charge overnight delivery fees and the cost of reinstatement/payoff preparation.

At bottom, if any undefined or unclear charge (sometimes called a "corporate advance") shows up on a homeowner's account, one should always ask the loan servicer for an explanation to make sure the charge is accurate and warranted.

What happens if a lender charges incorrect fees?

Lenders do sometimes charge incorrect and excessive fees, and homeowners have the right to challange those fees during the foreclosure.

At The Law Center, we are a team of specialists that are passionate and up to date about the foreclosure process from start to finish and helping homeowners at the highest level. Our staff and attorneys approach each client and each property as a new challenge, one that requires thorough analysis, zealous representation, and thoughtful strategy. It’s your home, let The Law Center help you defend it.

Call us now and speak with a foreclosure expert on how you can make the foreclosure process work for you -- not against you. (312) 600-8815

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