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South Carolina moves to protect homeowners from predatory fees

Headlines have been filled with the news of a major settlement between the government and banks over unfair lending and foreclosure practices. Mortgage lenders have received a lot of attention for treating their customers poorly and the addition of unnecessary fees attached to real estate transactions. The South Carolina Legislature has addressed predatory mortgage fees by banning them under the provisions of a new law.

Governor Nikki Haley recently signed a bill that eliminates private transfer fees. Popular media has dubbed these transaction fees as "Wall Street Home Resale Fees." The bill's sponsor in the South Carolina House of Representatives indicated that these fees damage homeowners, homebuyers and home values. At the time the bill was signed, South Carolina joined 37 other states that have banned these unscrupulous charges.

Supporters of this effort indicate that such fees truly hurt consumers and the housing market, which is already in fragile shape. Another concern is that such fees attached to residential real estate transactions impinge upon property rights, since homebuyers should not face additional obstacles to homeownership when they've already provided the funds to buy their homes.

The idea behind including private transfer fees in real estate transactions is that a portion of the sale price will be paid to a third party every time a house is purchased. One company was attempting to sell the rights to these fees to Wall Street investors. This is seen as a direct move to take equity from homeowners.

Potential homebuyers are very hesitant in today's housing market, because of perceived volatility and predatory lending practices. In essence, homebuyers have trouble trusting that they are making the right decision, because there is so much to worry about. Thankfully, South Carolina homeowners have received some additional protection from unfair lending practices.

Buying a home is one of the most serious decisions a person will make in their lifetime. Since buying a home is such an impactful decision, consumers have a right to feel protected when they are buying a home and should have someone to advocate on their behalf if something goes awry. Purchasing a home can help a person achieve a lifelong goal, so harmful fees and other unnecessary obstacles should not stand in their way.

Source: Market Watch, "South Carolina Becomes 38th State to Restrict Dangerous Wall Street Home Resale Fees," Jeremy Yohe, Feb. 21, 2012

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