Lender screwed up

[purple unicorn]

What is the name of your state? Idaho

Getting ready fo the closing on our new house I called my lender to make sure the monthly payment of 751.00 (loan amt 136,000) included principal, interest, taxes and insurance. He said yes. I asked are you sure? He said yes. Getting our 1st payment invoice the payment is now suddenly 911.00. Calling our lender he now says the 751.00 did not include taxes and insurance. The lender is willing to take responsibility for the miscommunication but says he can't change anything. We have an Initial Escrow Account Disclosure Statement from the closing which we initialed showing the higher payment (it's at the bottom of the page, below where we initialed). The truth in lending disclosure shows the lower payment. We might have caught on to this discrepency earlier but had to rush thru closing because the seller's agent played games with us on the closing date, telling us there should not be a problem getting a closing date we wanted and then as closing approached moving it up, causing us to have to scramble to get all the documents ready. Truthfully the lender worked hard to make the deal go thru. We both are going in to see the lender tomorrow to hash this out but I'm not optimistic. My partner in this transaction wants to sue the lender if we can't work things out, but I'm not sure we have a leg to stand on. If the bank won't budge do we have any recourse, legal or otherwise? Or are we stuck with the higher payment? A complication: I work for my lender, but in another division than the home mortgage section. Legal help isn't available to employees.

Thanks for any advice any one can give.

[socalcondo]

Wow....I feel for you, my friend. I've learned a very valuable lesson in my recent broker/lender mishap: "Get it in writing and signed on the dotted line before acceptance." The problem is, these brokers/mortgage lenders play the "delay game" in getting you the numbers in writing. They'll talk it up on the phone and swear great numbers for you, but it isn't any good unless it's in writing. Another lesson learned and now moving forward in life. I hope things turn around for you for their mistake and miscommunication.

[purple unicorn]

So we're screwed?

[HomeGuru]

Originally Posted by purple unicorn

What is the name of your state? Idaho

Getting ready fo the closing on our new house I called my lender to make sure the monthly payment of 751.00 (loan amt 136,000) included principal, interest, taxes and insurance. He said yes. I asked are you sure? He said yes. Getting our 1st payment invoice the payment is now suddenly 911.00. Calling our lender he now says the 751.00 did not include taxes and insurance. The lender is willing to take responsibility for the miscommunication but says he can't change anything. We have an Initial Escrow Account Disclosure Statement from the closing which we initialed showing the higher payment (it's at the bottom of the page, below where we initialed). The truth in lending disclosure shows the lower payment. We might have caught on to this discrepency earlier but had to rush thru closing because the seller's agent played games with us on the closing date, telling us there should not be a problem getting a closing date we wanted and then as closing approached moving it up, causing us to have to scramble to get all the documents ready. Truthfully the lender worked hard to make the deal go thru. We both are going in to see the lender tomorrow to hash this out but I'm not optimistic. My partner in this transaction wants to sue the lender if we can't work things out, but I'm not sure we have a leg to stand on. If the bank won't budge do we have any recourse, legal or otherwise? Or are we stuck with the higher payment? A complication: I work for my lender, but in another division than the home mortgage section. Legal help isn't available to employees.

Thanks for any advice any one can give.

**A: what payment amounts were noted in your HUD-1, TIL statement and mortgage note?

[purple unicorn]

HomeGuru asked: "**A: what payment amounts were noted in your HUD-1, TIL statement and mortgage note?"

Both the note and the truth in lending statement have the 751.00 payment on them. I'm not sure I got an HUD-1 statement - it's not in any of my paperwork from the bank or title company (unless I'm not recognizing it). I do have the Supplemental Loan Closing Instructions (from the bank to the title company) which note the 751.00 as P&I. At the bottom it asks the title company to fax back the HUD-1 statement. I could probably get a copy if necessary.

Like I said we were going to do in my initial post we met with the banker today and as I feared, he wouldn't budge. Because we initialed the Initial Escrow Account Disclosure Statement which had the 911.00 payment on it therefore the whole payment was disclosed. One thing I thought of today was that the banker and his assistant were the only ones really familiar with the loan. At closing the banker couldn't make it and his assistant was going to show up. At the last minute something came up and the assistant couldn't make it so the lender was represented by a third person we had never met before. I don't know how familiar she was with the loan but I suspect she didn't have as much knowledge as the banker and his assistant. At our meeting today the banker did say he would have closely guided us through the closing if he could have been there. I wondered if maybe there was a fiduciary responsibility issue here.

I hope this helps. I also hope I'm not grasping at straws here.

[nextwife]

Have you calculated the APR and compared it to the payment to make certain they are not padding the deal with points that were not discussed? That is a big discrepancy. There are many online calculators for calculating what the P&I payment should be.

When is your closing? If the APR is higher than you agreed to, sometimes one can transfer the file to a different investor package and get a fast approval. Likely too late for that.

[HUD-1]

The Truth in Lending Disclosure Statement will only show the P&I. Next to "Amount of Payments" there is an asterisk that refers you to the statement "Includes mortgage insurance premiums, excludes taxes, hazard insurance or flood insurance." The Note refers only to principal and interest. The lender apparently made a misstatement, but properly completed the forms. The question therefore becomes, do you qualify for this mortgage at the $911 or do you only qualify for the $751. If they approved you for a loan that you do not qualify for, then you would have a valid issue with the lender.

[purple unicorn]

Nextwife asked: "Have you calculated the APR and compared it to the payment to make certain they are not padding the deal with points that were not discussed?" That is a big discrepancy. There are many online calculators for calculating what the P&I payment should be."

The APR calculation does appear to support the 911.00 figure.

HUD-1 said: "The Truth in Lending Disclosure Statement will only show the P&I. Next to "Amount of Payments" there is an asterisk that refers you to the statement "Includes mortgage insurance premiums, excludes taxes, hazard insurance or flood insurance." The Note refers only to principal and interest. The lender apparently made a misstatement, but properly completed the forms. The question therefore becomes, do you qualify for this mortgage at the $911 or do you only qualify for the $751. If they approved you for a loan that you do not qualify for, then you would have a valid issue with the lender."

We originally looked at a house for a price higher than for the house we bought and the lender approved us for the higher priced house with a payment of 1250.00.

Guess what I found? The Truth in Lending Disclosure does not include an asterisk next to the amount of payments and it does not have the statement on it "Includes mortgage insurance premiums, excludes taxes, hazard insurance or flood insurance."

Do we have them?

[HomeGuru]

Originally Posted by purple unicorn

Nextwife asked: "Have you calculated the APR and compared it to the payment to make certain they are not padding the deal with points that were not discussed?" That is a big discrepancy. There are many online calculators for calculating what the P&I payment should be."

The APR calculation does appear to support the 911.00 figure.

HUD-1 said: "The Truth in Lending Disclosure Statement will only show the P&I. Next to "Amount of Payments" there is an asterisk that refers you to the statement "Includes mortgage insurance premiums, excludes taxes, hazard insurance or flood insurance." The Note refers only to principal and interest. The lender apparently made a misstatement, but properly completed the forms. The question therefore becomes, do you qualify for this mortgage at the $911 or do you only qualify for the $751. If they approved you for a loan that you do not qualify for, then you would have a valid issue with the lender."

We originally looked at a house for a price higher than for the house we bought and the lender approved us for the higher priced house with a payment of 1250.00.

Guess what I found? The Truth in Lending Disclosure does not include an asterisk next to the amount of payments and it does not have the statement on it "Includes mortgage insurance premiums, excludes taxes, hazard insurance or flood insurance."

Do we have them?

**A: no. I would advise you have a mortgage broker take a look at your docs.

[purple unicorn]

In my investigation of this whole situation I ran across something that could help: refinance into a LIBOR interest only loan. Under the current LIBOR rate of 4.8 I could get a total payment of 718.00. How much do we know about LIBOR loans?

[HomeGuru]

Originally Posted by purple unicorn

In my investigation of this whole situation I ran across something that could help: refinance into a LIBOR interest only loan. Under the current LIBOR rate of 4.8 I could get a total payment of 718.00. How much do we know about LIBOR loans?

**A: well, how much?

[purple unicorn]

I found out more about it today. LIBOR stands for London Interbank Offered Rate and is a rate offered by banks in the UK on U.S. dollar securities. The rate is always less than U.S. prime. LIBOR loans are adjustable rate but the rate does not fluctuate as much as the U.S. Prime. The highest the rate has ever been is about 10% but that was around 1980 when U.S. interest rates were 18-20%. You can get LIBOR interest only loans with a fixed rate for a period of time (like 5 or 10 years) and then the principal is amortized over the rest of the life of the loan as with conventional ARM loans. Banks don't heavily advertise LIBOR loans because they don't earn as much money. Try doing a google search on LIBOR and see what you get! The way it was explained to me a $700 a month payment would be reduced to about $400 a month during the interest only period.