Post Closing Cost - Due to Error?

[SHGUP]

What is the name of your state? AR

We the home I purchased was appraised lower than the agreed price by the VA appraiser, the seller said they would pay 1740.00 of my closing cost and reduce the home to the appraised value. I said that I would pay the first 700.00 of the closing cost and the realtors said that they would pay any amount over 2440.00. We all though that the realtors would only have to split about 600.00 in costs. At closing the bank gave me all of the credits when they wrote their part of the closing and I informed the title company that I thought I would have to pay about 500.00, but they said no, you get 500.00 back and a credit of 500.00 towards the principle. A week later my realtor calls and says the the bank messed up and the realtors had to pay about 3000.00 in closing costs because the bank was not supposed to give me the credits. Now they are telling me that I need to pay about 1700.00 that was miscalculated by the bank. I was going to pay back the 500.00 that I received and the 500.00 that I thought I was supposed to pay at closing, but the bank says the transaction is complete and they are done with it. After reviewing the contract I don't think I should have to pay anything because the closing company and the agents should have specified that they would not pay more that 600.00 in closing cost. I feel like they are adding a extra 700.00...from where, I don't know. Do I have to pay the 1700? Do I have to pay anything? Please help. Thanks

 

[MortgageGuru]

Who prepared the HUD-1? Who signed off on it? It's standard practice that the agents get a copy of it prior to closing in order to prevent these mistakes.

 

[SHGUP]

Arkansas

The HUD-1 was completed by the closing company (title company) in conjuction with the bank. I closed on the 23rd of July and was the first to sign the HUD-1, I am sure that all of the other parties have signed off by now. My realtor was out of town and said that the closing company (title company) would take care of everything. The other realtor was in the neighboring city with the seller closing on a different house.

 

[MortgageGuru]

Sounds like every party involved dropped the ball on it. You were supposed to have brought $700 to closing. Instead, you received a check for $500 and they applied an additional $500 to the principal of your loan. Hence, you owe them $1,700. The title company royally screwed up on it. You know that you owe them $1,200 of the $1,700. The title company should be the one that eats the additional $500. It was their mistake.

 

[nextwife]

The title company royally screwed up on it. You know that you owe them $1,200 of the $1,700. The title company should be the one that eats the additional $500. It was their mistake.

IT's more complicated than that. In many underwriting requirements, the buyer is NOT ALLOWED to get cash back at closing from the seller/broker. Yes, they can get closing cost assistance, but they cannot PROFIT.

The loan may not be deliverable to the investor unless this is corrected. Title company covering this does not change the fundamental problem that the buyer got cash back that was not authorized by the lender when the loan was approved.

 

[SHGUP]

The Title Company Spoke With The Bank On Closing Day About The Refund And It Was Okayed By Both Parties. The Bank Says That The Transaction Has Been Finalized And No Further Monies Must Be Paid.

The Actual Figures Are: The Seller Agreed To Pay 1740.00 Of The Closing Costs, I Was Supposed To Pay 700.00 Of The Closing Cost Plus My Home Warranty (409.00) And The Realtors Agreed To Pay Any Closing Cost Over 2440.00. I Had Already Paid In 500.00 In Earnest Monies And 325.00 In Prepaid Closing Costs. So I Was Supposed To Bring 284.00 To Closing.

If The Realtor And Title Company Would Have Requested That I Paid Back The 500.00 That I Received At Closing And The 284.00 That I Was Supposed To Pay, I Would Have Settled This Matter. Instead They Are Asking Me To Pay 1648.84. There Is Almost A 1000.00 Difference.

When I Talked To The Bank (bank Of America), They Told Me That It Was The Closing Company And Realtor's Responsibility To Review And Ensure That All Of The Documentation Was Correct, And That I Did Not Have To Pay Anything Because It Was There Screw Up And They Would Learn From Their Mistakes.

I Just Want To Make Sure That If I Don't Pay There Will Not Be Any Legal Encounters In The Future.

One Thing That I Have Noticed Is That The Title Company Has Not Contacted Me Only The Realtor That I Used. That's Kind Of Strange?

 

[MortgageGuru]

That's not strange at all. The Realtor's paycheck was the one that was shorted. You can get cash back at closing up to the amount already deposited on the property, in this case, $500. The remainder had to be credited to the balance of the loan as per HUD guidelines.