Is this closing modification legal?

[Andrew54365]

What is the name of your state (only U.S. law)? PA

On closing day, it was agreed I would get an additional $875 for a new water heater. But they did not want to change the closing loan amount (I do not know why). The closing mortgage already included a 3% seller assist on the conventional loan, which is the maximum amount a buyer with a conventional loan is allowed to get. So my realtor and the other realtor said to cut a check from the notary (who gets the money from the seller) to someone I know. I asked if it was legal and they both said it was. So I chose my father. The check says "Desc:Water heater installation." Its listed on the HUD as "water heater installation to [my father name here] 875.00." I did not feel comfortable with it, but I was in the midst of professionals who said it was fine. Now my father says he does not to do it because he feels it illegal. The idea being my father gets the money and I get his advice and the money from him for the water heater.

Is this legal? If its a gray area, who would I go to to find out if all is kosher?

Also, is there a way out of this? If my father decides not to take the money and I give the check back to the notary...who get the $875, the notary or the buyer?

Thanks

 

[HomeGuru]

What is the name of your state (only U.S. law)? PA

On closing day, it was agreed I would get an additional $875 for a new water heater. But they did not want to change the closing loan amount (I do not know why). The closing mortgage already included a 3% seller assist on the conventional loan, which is the maximum amount a buyer with a conventional loan is allowed to get. So my realtor and the other realtor said to cut a check from the notary (who gets the money from the seller) to someone I know. I asked if it was legal and they both said it was. So I chose my father. The check says "Desc:Water heater installation." Its listed on the HUD as "water heater installation to [my father name here] 875.00." I did not feel comfortable with it, but I was in the midst of professionals who said it was fine. Now my father says he does not to do it because he feels it illegal. The idea being my father gets the money and I get his advice and the money from him for the water heater.

Is this legal? If its a gray area, who would I go to to find out if all is kosher?

Also, is there a way out of this? If my father decides not to take the money and I give the check back to the notary...who get the $875, the notary or the buyer?

Thanks

**A: the seller could have agreed to just pay for a new water heater. There is no limit on repair costs. Or escrow should have just held back the amount from seller proceeds for the repair.