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My husband and I recently purchased a home. Before we did the final paperwork, the bank gave us a final estimate of our monthly mortgage payment, although they told us it may be off $5. When we went to closing, we found out the actual payment was going to be much higher than what they told us because they lied about the property tax. They told us the property tax was half of what it actually was. They told us if we didn't sign we could be sued. They also said this was an accident and they accidentally misquoted the property tax, although they had the actual taxes in their hands when they gave us the final estimate. Is this illegal?
Lenders are "given" the tax information by third parties like the agent or the title company. They don't make up their own numbers. Why is this the lender's fault? Did your agent/title company give the wrong information? A complete Tax Certificate has to be pulled prior to closing in order to give the lender the correct information.
If this is a brand new house, they might have been quoting the unimproved land, which is very common. You're approved with the improved land value, but they can only collect taxes based on the published number.
Last edited by Green Irish Eyes; 11-02-2011 at 07:40 PM..
Reason: Deleted off-topic comments
I'm betting it was new construction. If so, be prepared for the supplemental tax bill, if your jurisdiction collects in arrears. Taxes are what they are. No one deliberately misleads someone on taxes - they are a matter of public record. Yes, it stinks your payment is higher than what you thought it was going to be, but this is an action that will happen time after time during the life of your loan. If you defaulted on your loan because the taxes were higher, yes, in most states that would put you in breach of the contract and subject to a suit. (Qualifer: I am not an attorney, but this is pretty common knowledge within the industry).
imo it is the buyer's responsibility to know what the taxes are when they are putting in an offer on a house. Sure a good lender will have the tax figure correct, but the taxes 'are what they are'. And yes it is legal.
imo it is the buyer's responsibility to know what the taxes are when they are putting in an offer on a house. Sure a good lender will have the tax figure correct, but the taxes 'are what they are'. And yes it is legal.
+1
Caveat emptor. Taxes are easy to verify, and I seriously doubt anyone "lied" to you. Mistakes happen.
It is also possible that they were quoted an amount with a homeowner's exemption on it, and that exemption has since been lost. In my area, that would double the taxes.
Does it matter? Incompetence is still incompetence. No matter who they knew or who referred them.
That said.... the buyer should have checked the taxes themselves. Lesson learned.
Yeah, it kind of does matter. Several of us here have been repeating the mantra, "discount, at who's expense?" That would be a reference to a "special" discount given, yet the individual loan officer has little to no experience and the borrower is the one that pays the ultimate price......or in the case of an online lender, where they really don't care if the realtor ever refers them a deal, because they don't depend on the real estate community for business. This can result in the online lender totally screwing up the transaction with zero repercussioins. If a lender is active in the community they lend in, they aren't going to bite the hand that feeds them.
So yes, there is a method to the madness of asking how they found that lender.
The buyer should have been given a preliminary title report that contains the taxes (rates and special assessments). Buyers need to read these documents! If they amount was wrong, there might be some recourse to the title company but the lender is only going on what they are told.
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