Is the mortgage company ripping me off?

Oregon
My husband and I just refinanced from a 3 year ARM (which we were told it was NOT a negetive interest loan and it was) to a fixed 30year. In the process of this, the old morgage company sent a settlement statement that I did not see untill after the mortgage was complete. They used our escrow balance to pay off the balance which I was expecting to get back. Since the escrow account was a seperate account from the loan. Do they have the right to do that???????[/FONT]
Then the settlement statement calculated interest through to the end of the month (31st) and the loan was funded to them on the 14th. This was confirmed to me by someone at the mortgage company. But they also said they would take 14-15 days to process the finalization of the loan. Basically they are trying to get the 6 days of interest that they are not intittled to. Is this leagal??? Please let me know what my rights are as an inocent buyer.

Duplicate. Please delete.
https://forum.freeadvice.com/showthread.php?t=329697

You need to get your verbiage correct. To what you are referring is a pay-off statement and not a settlement statement - huge difference here. Yes, they can reduce your pay-off by the amount held in your escrow account. Think about it. It makes sense to do so.

You must have had a lousy loan officer as interest on mortgage payments are actually paid in arrears. If your loan funded on the 14th, then yes, they wil charge you for interest through the end of the month. You received the benefit of the funds on this day did you not? You paid for the interest through the end of the month at closing because your next and first mortgage payment will not be due until the first of the next month. If you closed, for example on July 14th and you pay interest through the end of the month, your first payment will not be due until September 1st. Your September payment pays interest for the month of August....

Krlaney said:

Oregon
My husband and I just refinanced from a 3 year ARM (which we were told it was NOT a negetive interest loan and it was) to a fixed 30year. In the process of this, the old morgage company sent a settlement statement that I did not see untill after the mortgage was complete. They used our escrow balance to pay off the balance which I was expecting to get back. Since the escrow account was a seperate account from the loan. Do they have the right to do that???????[/FONT]
Then the settlement statement calculated interest through to the end of the month (31st) and the loan was funded to them on the 14th. This was confirmed to me by someone at the mortgage company. But they also said they would take 14-15 days to process the finalization of the loan. Basically they are trying to get the 6 days of interest that they are not intittled to. Is this leagal??? Please let me know what my rights are as an inocent buyer.

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Not sure if your state is the same, but in PA this would not be allowed. Lender must refund the entire balance of escrow account within 45 days, and it may NOT be applied to principle balance. Contact an attorney, or lookup the statutes concerning escrow accounts for your state on your own

It is at the Lender's discretion whether or not to allow the Title Company to "net" the Escrow Balance on your existing mortgage thus lowering your payoff amount. This is beneficial in two ways. First, your payoff amount on existing mortgage is lowered which means you could actually receive cash at Settlement with your Refi as opposed to bringing cash to Settlement. Second, you receive your existing Escrow balance at Settlement as opposed to your Lender mailing it up to 30 days after Settlement.