Garbage fees are additional fees charged to the borrower at the final stage of mortgage loan approval.
Fees that include unnecessary fees are considered excessive, dishonest and almost always unexpected.
Garbage fees are not illegal or hidden, they are included in the HUD-1 payroll, which lists all the fees that the borrower must pay when closing the deal.
Borrowers always have the right to challenge junk fees and negotiate fairer costs, but often do not, leaving lenders to profit from junk fees.
In 2015, the Consumer Financial Protection Bureau made many changes to the closing process, including a rule that no fee can be overcharged by more than 10% of the credit score before final closing.