Banking Commissioner, Attorney General, DCP Announce
North Fork Bank to Refund, Forgive $106,000 in Illegal Mortgage Fees
March 23, 2005
Attorney General Richard Blumenthal, Banking Commissioner John P. Burke and Department of Consumer Protection (DCP) Commissioner Edwin R. Rodriguez today announced that North Fork Bank has agreed to refund or forgive $106,252 in illegal mortgage fees charged to Connecticut consumers.
Starting in 1998, Long Island-based North Fork Bank began charging state consumers an illegal "satisfaction fee" when they paid off mortgages. The fee was for preparation of mortgage release papers. Such charges are illegal in Connecticut.
The fee was usually $75, although some consumers paid more or less.
"North Fork Bank fleeced consumers with an illegal fee," Blumenthal said. "Borrowers deserve full satisfaction - dollar for dollar back for this so-called 'satisfaction fee.' They will receive refunds or forgiveness of $106,000. The outcome should send a message: We will stop financial institutions from using creative billing to squeeze extra dollars from consumers."
"The cooperation between the departments, together with the willingness of North Fork Bank to acknowledge the state law, was critical in the development of this settlement," Burke said.
"It is important for consumers to question any fees they are charged, both to understand them and to see if they are legitimate," Rodriguez said. "In any real estate financing situation, consumers need to get a 'good faith estimate of fees' when they begin the application process, and make sure that the fees eventually found on the closing statement conform to the estimate. They should never hesitate to question the loan officer or the closing attorney about any fees that seem questionable."
Under the agreement, North Fork will send refund checks totaling $78,502 to 946 Connecticut consumers. Most will receive $75. In cases where the bank could not determine how much consumers paid, they will receive $150.
North Fork also agreed to forgive $27,750 in unpaid "satisfaction" fees on 370 Connecticut loans.
The bank stopped charging the fee in September 2004 after Blumenthal began investigating.