Those Nasty Closing Cost Surprises

The federal Department of Housing and Urban Development (HUD) is instituting new laws to make closing costs more obvious to home buyers.

A lot of lenders and mortgage brokers try to slip in junk fees to make a quick buck with mystifying charges.

Kenneth R. Harney reports: Remember the bad old days of 11th-hour mortgage cost shocks and mystery junk-fee charges? Remember when the "good-faith estimates" your lender gave you upfront said closing costs would be about $2,000, but somehow they ballooned to $3,500 on the final closing sheet?

Worse yet, you had to come up with the extra money to handle the surprise costs or the home purchase or refinancing could not proceed.

Those days are still here — consumers continue to be unprotected from closing cost shocks or intentional low-balling of fees — but in about eight weeks the situation should change dramatically.