Help Mortgage lenders!! I am suppose to close on a house today!?

Question

I was suppose to close on a loan today at 3pm and the loan officer calls me up last night at 6 pm and said that she didnt factor in the right amount on the real estate taxes, PMI, and house insurance. Now the payment she quoted us from the beginning and what was on the Good Faith Estimate has jumped $300. She says there is nothing else she can do? What are my rights here. I feel like she has done us wrong. I have paid out of pocket to put a contract on this house and for the appraisal and for the termite inspection. Now the night before closing she tells us all this. Please help!! We really want this house and would like to close on it but I cannot agree on what the payments have jumped to!

The first program that she was trying to qualify us under was called Community Homebuyer's through Fannie Mae. Well I have since found out that you cant make more than $38,000 a year. Me & my husband make like $25,000 a year a piece so Im not sure why she would even try from the beginning to qualify us on that. I feel so betrayed!! Now last night when I talked to her it was sort of like take this or leave it and I feel like we should have more options like a conventional mortgage, etc. She says no. I think she has made a large mistake and now we have so much money out of our pockets sitting here that we just lose and she dont care!

We have not changed anything and have not bought anything. The program she was trying to qualify us under she says dont make you have PMI and when she seen that we fell out of that program by our income then she had to factor in PMI. She under estimated the taxes by $800 and only calculated our insurance per year at $400 and it was $829. She says she has been doing this for 20+ years. I could have told her how much the taxes were b/c you can look that up online through our courthouses web site. I think she sort of jumped the gun by having us get the appraisal done before knowing all the bottom line figures here!

Answer 1

It sounds like all the costs for the actual loan are the same, the only differences are that she estimated the taxes, insurance low by about 100 bucks a month, and then added $200 in PMI. The PMI on programs that are not community lending is much higher than the community programs.
The main problem here is that she would have known you don't qualify for the community lending program and they'd have to get it underwritten under this new program about a week ago at the latest. Why she didn't tell you about the change in PMI costs is beyond me.
You can always try an Intrest Only program, but they typically don't save that much off your payment. It depends on your loan amount and how much they want to raise the interest rate to do that, as far as how much you'll save.
I would consider your real options to be
1. Either accept the changes, even though they were given to you in an unethical manner and hope she hasn't done anything else against your best interests.
2. Contact the real estate agents and tell them you have to arrange alternate financing since the terms of the mortgage changed. Then go to several different brokers or lenders and find one that doesn't operate this way.

Either option you choose, I'm sorry that someone put you in this position to begin with.

Answer 2

I understand the frustration you feel, but keep in mind that the loan officer does not control the taxes, the PMI, or the insurance. Which one went up? Was it one of them that went up or all three? If it was the taxes, weren't the taxes on some of the listing forms? If it was the PMI, then that PMI sounds expensive. Try to get out of PMI. If it was the insurance on the house, call around and get competitive quotes. Try State Farm, they are good. Call on the phone and get three quotes and see if you can save some money there.

I think you need to figure out the details of what went up. And also make sure that the monthly payment on the loan is the correct amount. Sounds like the loan officer needs to be "watched."

Answer 3

I had the same thing happen to me. Mortgages aren't fun. One option is to call and see if there's another way to lower the costs. You can get creative in your loan to get out of PMI - but that will only save you alittle. (Do like an 80-15-5, or 80-10-10 - which is having the primary mortgage for 80% of the value of the house, then a Home Equity Line for 10 or 15% of the value, and putting the rest down in cash).

Another option is to see if you can do another kind of loan. For example - if you're doing a 30-year fixed conventional loan, see if you can do an Interest only option for 5,7, or 10 years. Should cut your monthly payment by a few hundred for a couple years (during this time - pay extra to drop the principal).

One more thing - ask for another GFE (Good Faith Estimate) in writing with the new figures. Compare it to the old one - and make sure what she has listed are the ONLY fields that are changing. And be sure to have them answer EVERY question you ask.

Good luck.

Answer 4

i can understand the lender not having the right real estate tax and home owner's insurance figures up front. lender's won't have that correct figure until you get your insurance policy in place and the title company gets the lender the tax info, but for the lender to not have the right PMI figure sounds a little fishy. get in touch with a supervisor at the lender and have him or her explain the $300 increase. if you are working with a real estate agent on the buying side let him or her know as well. they will likely call the lender and get to the bottom of it since it is in their best interest that you close or they won't get paid. have the real estate agent get a copy of the new GFE and compare it to what was given to you initially.

did anything change with your loan? did you switch products? put less of a down payment? do something with your credit (like make a big purchase, make any late payments) since you first applied for your mortgage? these factors will influence PMI sometimes.

good luck!

Answer 5

Ensure that the items for which the increased payment are the costs she states. If the interest rate, points, loan amount or any other variables are different on the closing documents, then do not sign. If it truly is the costs outline, you don't have much choice. You can shop around for insurance and you could possibly restructure the loan or put more down to avoid pmi.

PS do not feel pressured to close today. In most cases, there is nothing wrong with delaying a closing by a few days. This is a 30 yr. commitment, get it right.

Answer 6

You have options, call the loan officer and explain that you have a commitment letter and agreement in writing. If they quoted you and you have it in writing, then that is the deal agreed to and the lender will have to absorb the difference. You might also mention to them that your next call is the the FTC -Federal Trade Commission about their business practices. 877-FTC-HELP! Now you have the number. This is crap, they new long ago what would happen.
Obviously you must call the other parties and the closing company that the loan is now delayed. Explain what your loan company is doing. Ask for their patience for a few days until you can sort this out. I would also advise you to seek another lender (make it a local lender) to help you out of this bind. Make sure you get everything in writing!

I am so mad right now I could spit! Best Wishes

Answer 7

It sounds like with a jump like that, she didn't factor in those items at all.

You have my sympathies.... I've been through this process twice now and every time something seems to come up that will ruin the deal. And it ALWAYS seems to happen in the "Eleventh Hour". Both of my situations worked out well and we got each house in the end. But it does suck to feel so stressed because someone else's actions (or their incompetence) might screw up a deal you really want to happen.

My suggestion.... Check with the closing agent (who should be an attorney/closing office that is independent of the mortgage lender) into postponing the closing and look for another loan officer.

Unfortunately, if the deal does fall through those expenses you mention may be lost.

Answer 8

It depends if the lender does a final confirmation of employment before closing. They may not, but if they do check it again before funding and his income was needed to qualify for the mortgage, they will not close.

Answer 9

I would ask for a $300 lender credit