Banks Accused of Improperly Marking Up Broker Price Opinion (BPO) Fees

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Some mortgage lenders, including Santander Bank (formerly Sovereign Bank) are accused of improperly marking up the cost of Broker Price Opinions (BPOs).

Mortgage agreements allow banks and lenders to pass through the costs of getting BPOs from third party real estate brokers directly to the borrowers. BPOs are typically ordered once a borrower is late with a payment or defaults on a residential loan.

However, mortgage agreements require that the borrower pay the actual cost of the BPO to the lender, and that the fee imposed on the borrower may not be marked up by lender. One of these lenders, Santander Bank, has been accused of using automated software to order BPOs from brokers, and then marking up the BPO fee it charges borrowers who are late with a payment or default on a residential loan. This mark up breaches the terms of the mortgage agreement and violates consumer protection laws, costing homeowners higher fees for BPOs than permitted.

Santander Bank is Accused of Impermissibly Marking Up the Fees it Charges Borrowers

Santander Bank (formerly Sovereign Bank) uses automated software that orders BPOs from brokers once a borrower is late with a payment or defaults on a residential loan. The broker charges a fixed amount of money for each BPO performed, and Santander is permitted to pass through the cost of the BPO to the borrower.

Instead of passing through the cost that Santander pays the third party real estate brokers for the BPOs, however, the bank first marks up each and every BPO before billing the borrower the marked up fee. The costs of these marked up fees are then added to the total amount the borrower owes the lender, resulting in increased indebtedness and less equity in the property. These marked up fees are often paid by the homeowner without fully understanding just what they are paying for, and that the cost has to be a pass through of what the bank has paid, causing the homeowner to slip further into default with their mortgage lender.

Santander Bank’s business practices:

  • Breach the terms of the mortgage contract;
  • Go against good faith and fair dealing practices, among other violations;
  • Violate consumer protection laws; and
  • Use marked up BPOs as a profit center to take advantage of mortgage holders that may not understand what they are being charged for.

If you currently have a mortgage with Santander Bank (or another mortgage lenders) and have been charged for a Broker Price Opinion that may have been impermissibly marked up, you may be eligible to receive compensation as a result of this mortgage lender’s business practices. To learn more about your legal options or to schedule a free consultation with a class action attorney from our firm, call (215) 278-4449. We represent homeowners in Pennsylvania, New Jersey, and throughout the United States.