As a general rule, the states with the highest populations tend to also have the most expensive closing costs. For the third year in a row, an annual report by Bankrate.com has found that New York has the highest mortgage origination and closing fees in the country. Number two is Texas, also number two last year, in closing costs and in population. The notable exception is California. While it the nation's most populous state, it came in as the 17th most expensive state in closing costs. Illinois which is fifth in population, ranks 49th in average closing costs, mainly because of the low price of title insurance, says Bankrate.

Based on a $200,000 mortgage, the average origination, title and closing costs across the U.S. were $2,736. But costs varied widely. An average borrower would pay $3,830 in New York, while in Indiana, closing costs would be $2,339 or $1,491 less for the same services.

The U.S. was split down the middle in terms of expense with 24 states plus the District of Columbia having higher closing costs than the national average, and 24 having lower costs. Only Minnesota and West Virginia both averaged $2,692, which were closest to the national average.

Because of differing taxes, customs and state regulations, some fees vary. While these fees may be included as line items on the HUD-1 -- that's a written summary of closing costs that is mandatorily given to borrowers three days before closing so they have time to review fees -- they aren't included in Bankrate's survey of closing costs.

In most northeastern states, attorneys customarily conduct real estate closings, with attorneys representing both the buyer, seller and the banker. But in the west, title agents and escrow officers conduct closings. While they are generally less expensive than attorneys, title insurance may be higher. Title insurance rates are set by the insurance department with heavy input from title agencies and insurance companies, says Bankrate.

That's like letting the fox guard the henhouse, but when it comes to real estate transactions, self-serving services are nothing new. Even though title agents don't market their services to consumers, they do try to influence real estate agents to steer customers their way, which makes the closing industry "rife with kickbacks and undisclosed referral fees among title agents, real estate agents and lenders," says the survey.

Attempts to lower closing costs have met with fierce resistance by the title industry and by smaller lenders who depend on fees for profits. Some lenders have adopted flat fee pricing, charging the same fees regardless of the size of the mortgage, while other banks such as Bank of America has introduced the No Fee Mortgage Plus, with no fees and no mortgage insurance.

Consumers should know that there's no free ride. If there are no fees, the mortgage interest rate will tend to be slightly higher.

Published: July 23, 2007

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.