She purchased a home in Dec. of 2005 with a 30 yr fixed mortgage, insurance, taxes and HOA fees for 2yrs included for $1,071 a month. After 6 mo. She started getting letters from the HOA that she owes them money after 9 mo into she received a letter from the mortgage company claiming there was an error in her mortgage and her payments will be increased to $1,171 dollars which created a finacial hardship. Can she sue the mortgage company and the company that did the paperwork because she certainly would not have purchased the house for that amount per month? I had advised her not to pur the HOA fees, taxes and insurance into her mortgage agreement cause I felt she would have came out way cheaper and would have gotten the $600 - $800 a month mortgage she wanted. She advised that she was over a barrel because she had to opt for 0 down no closing cost. This so called new home has been nothing more than a night mare since purchased. Somewhere there is a leak, the ac is broke. Help!
2007-10-21 00:49:43 · 5 answers · asked by calmlikeatimebomb 6 in Business & Finance ➔ Renting & Real Estate
From what I am looking at it looks like they under estimated the HOA fees.
2007-10-21 02:21:43 · update #1
I gave my sister the advice about not having those fees included in her mortgage payments because sometimes the mortgage companies blow up the fees and she can get those things more competatively priced else where and with discounts.
2007-10-21 11:30:15 · update #2
I feel she has the right to sue someone cause I feel she got scammed. The Mortgage company did not even continue to honor the agreement that was in the contract about the HOA fees. Through my sisters husband's employer they can actually get a home insurance discount, taxes are a piece of cake to pay at the end the year and she doesn't need the mortgage company to do that cause that first year we also got a bill fot that and we had to clear that up. As far as HOA fees that between them and her but they are only 25 dollars a month.
2007-10-21 11:38:14 · update #3
Mistakes happen. Mortgage companies have less rules to follow (or choose to follow) than banks. She signed the papers. She could look into refinancing and change the terms of the loan. Go to someone else. Have her shop around.
On the house issue, join the club. You never really know what's going to happen in a house, just like a car. Although, you should have gotten a home inspection to make sure it's all in working order. But, something could have shown up after the inspection. Such is life, infortunately.
2007-10-21 01:10:59 · answer #1 · answered by Casie 4 · 1⤊ 1⤋
She has no legal recourse on the mortgage company. The escrow amount is subject to change at any time when the taxes, insurance, or HOA fees go up.
If an extra $100 a month is causing extreme financial hardship, she is living above her means anyway. Be thankful the mortgage company is not asking for her to back-pay what they missed.
She needs to look into the selling the property and finding something more affordable. HOA fees and taxes usually only go up, so that mortgage payment will continue to rise.
2007-10-21 02:43:44 · answer #2 · answered by ? 5 · 3⤊ 1⤋
Ok, I'll be honest here..the advice you gave your sister is wrong.
First, HOA dues, Taxes and Insurance are REQUIRED expenses..it doesn't matter if she paid them on her own yearly or had them escrowed...you claiming that it caused her a financial hardship is pure BS...if she can't afford to SAVE the money DURING THE YEAR...then how is she going to pay it at the end of the year? If she can't, guess what the HOA can do? FORECLOSE!
The bank DID NOT make a mistake in her payment...banks don't make mistakes like that b/c taxes, insurance and HOA dues are verified DIRECTLY by the loan processor and is a critical part of loan approval....otherwise the bank can be accused of predatory lending.
The notice that she received is called an escrow adjustment...it's legal...that means that SINCE she purchased the house, either the taxes, insurance premium or the HOA dues INCREASED and that resulted in an increase in her payment, plus they are allowed to collect the short-fall plus (in most states) a 2-month buffer to make sure her escrow account doesn't fall into the negative.
No, she can't sue for expenses that are directly associated with the loan. Her rate and term did not change, therefore, there was no misrepresentation.
Her home should be under warranty if it is new construction, so she needs to contact the builder and SUE THEM if the items are faulty that soon after installation.
2007-10-21 03:20:03 · answer #3 · answered by Expert8675309 7 · 3⤊ 1⤋
She has no legal recourse whatsoever. Buried in that pile of mortgage papers she signed is a disclosure that the mortgage firm will not be responsible for such clerical errors, and that she agrees to allow the lender to correct them. Frankly, your sister should have been aware of the value of the HOA (and other fees). Had she done her simple math, she would know the cost of the monthly mortgage payment, plus any escrow values for the HOA, insurance, taxes, etc.
2007-10-21 01:02:41 · answer #4 · answered by acermill 7 · 1⤊ 1⤋
She should have looked over the figures before she signed. She needs to pay the correct amount, whatever it is.
You offered illegal advise, she could not just decide not to pay her taxes, HOA fees and insurance.
You should stop advising her. If she follows your advice she will end up in trouble.
2007-10-21 04:34:50 · answer #5 · answered by Landlord 7 · 3⤊ 1⤋