Mortgage closing this week!! Tell me what is going on!!?

Question

Ok- I am supposed to close on a house this week. Actually I was suppose to close last week & things sort of fell through with the lender putting us in a first time buyer program when we are not first time buyers. So the night before closing last week she calls & tells us our payments are $300 more than the good faith estimate due to us "falling out of the program". Anyway she has reworked the loan & has given us a date to close as Friday however she says if it does not close by Friday then I will have to pay another $600 at closing if it falls into next week! What is up with this? I have never heard of such. I am already having to pay $3800 down on the house but why would another week make a $600 difference. Am I getting the run around. And today also she still cant tell us a time to close on Friday. She says the underwriter has all documents so it is out of her hands. Someone please explain!!

This is a house that has been lived in before that we have went through a realtor to buy.

Answer 1

First of all, your lender sucks (I've worked with them for over 7 years and this is terrible).

Unless you gave them false information or omitted something while in your application stage, they messed up. As such they need to pay for your late closing.

There are three possibilities for the additional fees: "Pre pays", The seller may have stipulated a "time is of the essense" type of clause, or a document redraw fee.

Pre pays are your tax and insurance. They fluctuate throughout the month because they are pro-rated. Going from one month to the next will cause this to increase. Also different months have different amounts that must be prepaid. Unlike your cell bill which you pay in arears, taxes and insurance are paid in lum sums by you through the mortgage company throughout the year. They have to collect a certain amount for the next payment during the close of escrow and then they collect a monthly amount from you as well.

A time is of the essense clause typically states that the transaction will be finalized by a certain date. If it is not, then they begin charging a certain amount per day until the transaction closes.

The last thing I can think of without writing a book is a redraw fee. Your loan documents cost money to draw up. They are typically only good for a certain amount of time, usually 5 days past the month they were drawn in. If your close of escrow (COE) extends beyond the docs expiration date, then they must be drawn again.

If you know of any Brokers that you can trust, you might consult them about this. If they charge you, I bet it would still save you money in the long run.

If you need further assistance you can email me "sentient by design (at) (this site) .com" no spaces.

I can refer you to my mother who is a real estate broker and she might be able to assist you for a small fee.

Answer 2

The initial problem of your lender putting you in a first time home buyer program when you are not sounds like your lender does not know what she is doing. Have you owned a home in the past 3 yrs? First time home buyers are classified as those that have never bought a home or those that have not owned a property in the last 3 yrs. I can understand that your rate will be higher than a special first time home buyer rate which would increase your payment but 300.00 more sounds excessive. The 600.00 more in closing sounds like prepaid interest. For example if you close at the end of the month you may pay only 1 day of prepaid interest however if you close at the beginning of the month you are paying prepaid interest for the rest of the month in your closing fees which depending on the loan amount could be 600. She needs to get a grip on your loan status. I would demand to speak to a manager.

Answer 3

Sounds to me like our loan officer dropped the ball by putting you into a program that wasn't right for you. As far as I see it you were locked into a program you didn't qualify for. Rates differ from program to program. If she had to change programs (and maybe lenders if she is a broker) your lock was no good and you had to or have to lock on a new program. It could also be that due to the amount of time it took to change the program yourlock is expiring.

Either way, it is the loan officer's fault in the firstplace for not knowing her program perameters. She should pay the additional amount either way.

Call her branch manager and find out exactly what is going on and demand that due to the program error you expect either she or the company to pony up the extra bucks.

She can't tell you when you will close because your lender cannot prepare your loan documents until the Underwrtiter has signed off on every thing andyou have final loan approval (which you don't have yet).

this is a mess, call the Branch Maanger NOW and raise cain!

Answer 4

Ask her for copies of all of the documents she has to date so you can update your records. Tell her if she can not match the good faith estimate she gave you, that you will go elsewhere. Tell her that you do not have $600 to give her. Tell her that you are not able to spend $300 more per month as you have to save for college or retirement or whatever. She has your financial information which puts you in a bad position as she has determined that you can afford these amounts. She may know that you don't have another $600. She is trying to force you to accept the high rate she is going to give you this week.

I've closed in two weeks going through a ReMax broker who had ties to lenders. ReMax came up with two possible lenders and got me a decent deal. Ask your real estate agent for a list of lenders who are reputable and can close quickly and will not charge you anything until closing. My lawyer friend recommends Ditech.

It sounds like your mortgage lender is not reputable. She realizes you are in a tough situation time wise and she is trying to milk you for more money every which way. She can put the squeeze on you because she is the only lender and she is not competing for your business. She is waiting until the last minute to spring these surprise increases on you which is exactly what my first broker did to me. There are many mortgage brokers who try to lure you in with the promise of a low rate and then jack it up in the end. I think you should walk from those people. Obviously, they can be shady because some people have no choice but to use them.

My first broker told me that she could get me 6% and when it came time for closing she wanted 9% and she wanted the house to be put in my dad's name. My dad was CEO of a bank, so there was no reason to charge him 9%. These brokers always have excuses. My dad ended up giving me the mortgage directly. At one point, I worked for a bank which offered special rates to employees. When I called for a mortgage, the bank told me they would approve me for a property that cost $35,000 or less.

I would try to locate another lender tomorrow that can close quickly and is reputable. It will be a lot of work and stressful, but in the long run, it will be worth it. By at least checking out other brokers, you should know what rates you deserve.

Answer 5

Are you buying new home from a builder? If so many times they will charge carrying cost for each day on in your case each week you extend past closing. If the chage is loan related I can have something to do with your lock. If your Mortgage Broker (who does not sound like a good one) Locked rate in you may be pay to keep that lock a little longer. As for the underwirting part it is kinda true once documents go there they have the finnal say but a good Mortgage Broker would do anything an everything to get stuff push through. My sugestion is calling your Escrow or Title Company to let them know that you are ready to close and provide them with any thing they may need to make it happen.

Good Luck I know you feel like you are the only one going through thing but you are not.

Answer 6

Do you have a realtor to help you? They can explain or research the costs. Why so much additional money doesn't sound right. Someone needs to be looking out for you. If you are without a realtor, then get an attorney and get them to help. Needs to be a real estate attorney (not a closing attorney if they are representing the other party). Don't accept anything less than answers! Fair credit - RESPA is a Federal Law that provides that ALL COSTS are disclosed to all parties. Now they don't guarantee that you understand but this is way too important to guess at. Get someone to help you before you sign anything!!!!!

Answer 7

It probably is a legit charge. The per diem interest is interest that you pay in your closing costs for every day between when the loan funds and when your first payment is due. There's more days that are covered if you close at the beginning of the month then at the end.
That having been said it sounds like it's completely the fault of your loan officer that this has come up at all. I would definitely call her branch manager and demand they reduce their fees or issue a credit Since it's their fault, I don't see why they wouldn't pay for it.

Answer 8

Depending on the state you are in it may be a penalty fee for being the delaying cause of the closing being rescheduled. You should look in you offer to purchase to see if that is a contigency. Or it could be that the closing at the beginning of the month versus the end is causing you to pay more interest on the loan for the month.

Answer 9

It's called bait and switch, and I'd write a letter to the regulating agency that oversees whatever bank is doing this. If it is a mortgage broker, they are being unbelievable slimey and trying to rack up additional commissions for themselves. You need to find a different lender and you need to READ every document and insist on your RESPA/Truth in Lending documents so you know what you are getting and don't end up getting screwed when the paperwork shoved in your direction at the closing isn't what you were expecting.

Answer 10

I put $58,000 down and about $5K in closing costs .
When you make a very low down in this mortgage market ,
Very few lenders want to take on your loan .
You are probably dealing with a broker (middle man)
Instead of the lender , so they are probably having difficulty getting you in with only $3800 .

If you up your down to 20% , you might find life easier and a LOT cheaper ( lower rates , no PMI etc )

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