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A quick look tells me that the actual figures came in under the GFE. Look at the 3rd thumbnail and you can see what the GFE read and the actual costs. On a 450K+ home, a variation of less than 1% is really not horrific. I prefer my estimates a bit tighter, 29 days interest can be $1829, and you are halfway to a 1% difference.
Your loan officer's biggest crime is not reviewing the figures with you, ie, not communicating. If you are the analytical/engineer type of buyer, the mortgage process is your Achilles heel. Your loan officer most likely doesn't know how to relate and communicate, possibly very early in her career and experience dealing with the public. How did you find her?
Reserves, or escrows, are nothing more than a side account to pay the bills associated with your property. This HUD shows the numbers were on the GFE (page 2, item #9). Look on page 3 at item 1101 - she estimated on the GFE what is on the HUD. Federal laws prohibit the lender from ever having too much at one time, and should that happen by error (over or duplicate payment), it's required to be refunded during the annual analysis.
I apologize if I am talking in circles, I am running on fumes, you sound pretty frustrated and I wanted to try to reply.........based on what's here, she is coming in under estimate.
Thank you for taking a look smartmoney, really appreciate it. So if I'm understanding correctly, you're saying the $3,362.25 charge on line 1001 is a reserve fund to pay any cost associated w/ the property?
I'm just confused because initially they gave us a GFE/HUD statement like this and it didn't have that charge on there. Basically the closing cost went up approx $3,000 which is why I'm concerned and frustrated at the officer for not explaining the difference from the original estimate.
EDIT: The officer has been in the business for many years. Her husband is our agent who again has been in the business for some 30yrs or such. Maybe that's the problem right there...I'd figure it'd be easier having a husband/wife team but nope.
So if everything looks ok, looks like I have to call the title company to get an explanation and breakdown of the tax charges since that's what the officer tells me they are on line 1001.
Also I will start to get charged on the actual close date, not the contract close date correct?
We were scheduled to close on 8/21/14(yesterday) but looks like it won't be done until Monday at the earlier, so the actual charges should be from 8/25/14?
And you are correct, I'm an engineer and trying to understand all this with no one explaining it is driving me nuts! I find it ridiculous that officer and lender expects us to just sign off on everything without understanding where all these costs are coming from! If I'm going to literally write off the next 30yrs of my life for a huge chunk of money you bet I want to know what every cent is paying for!
This has been a very trying ordeal as I did have a difficult loan situation so I can understand this isn't exactly easy for the loan officer, however things would go a lot smoother if she explained things for me. I have another property that basically my parents are paying for, and that's what causing majority of the issues.
I just want it all to be over....I will probably write up a detailed explanation of the whole process when this is all over.
Thank you Pfhtex! I'm going to try to get the HUD posted for further clarification. But yes, you are correct. Our loan officer has been of no help at all so looks like I will have to contact the title company.
Your lender sounds like a real tool! After closing you should let him and everyone you know that. HE should be the one clarifying every line and every cent with regard to your purchase. It sounds like his estimates are crap. If you have already paid for the appraisal the charge should be listed as P.O.C. (paid outside of closing) on the HUD and not be included in the list of fees. Or at least credited back to you ON THE HUD. Is he saying you are somehow going to get this money back after closing?? Same with the insurance, if you have paid your agent the 1st year upfront, have the agent provide a paid receipt and that item will/should be listed as P.O.C. as well and taken off the charges.
Add in, your lender is your agent's husband and he misses the close date?
Yep! The officer is definitely useless, and I'm definitely going to be writing a letter to her and my agent as well stating as such. I brought up as to why the appraisal's still on the HUD/GFE, and she said its taken off, but she admitted she hasn't even looked it over yet!
So, yes officer is telling me that I will get credit back after closing if those fees have been paid already. I'm not sure what the process is like to get money back if we were charged 2x, but I don't want that process to drag on and take months, which is why I want those charges taken off now, but she seems pretty resistant to making those changes.
Yes, the loan officer is the wife or our agent and we missed the closing date. Our agent didn't give us the escrow # right away so we couldn't wire the money soon enough which delayed the whole process. And furthermore because of this, we were pushed into doing a 90/10 instead of the 80/10/10 which we were originally going to do because the 90/10 can be done a lot quicker. My agent said we can just get an extension, and when he requested the extension, the seller said no and now is charging $150 a day past scheduled escrow date, not to mention now we're paying 5% interest as opposed to 4.5%, $100 more a month in interest fees alone.
This basically turned into a cluster and I just want it over at this point. I have contemplated just saying "screw it" and dropping the whole deal even if it means I'm out my deposit of $7k
Yep! The officer is definitely useless, and I'm definitely going to be writing a letter to her and my agent as well stating as such. I brought up as to why the appraisal's still on the HUD/GFE, and she said its taken off, but she admitted she hasn't even looked it over yet!
So, yes officer is telling me that I will get credit back after closing if those fees have been paid already. I'm not sure what the process is like to get money back if we were charged 2x, but I don't want that process to drag on and take months, which is why I want those charges taken off now, but she seems pretty resistant to making those changes.
Yes, the loan officer is the wife or our agent and we missed the closing date. Our agent didn't give us the escrow # right away so we couldn't wire the money soon enough which delayed the whole process. And furthermore because of this, we were pushed into doing a 90/10 instead of the 80/10/10 which we were originally going to do because the 90/10 can be done a lot quicker. My agent said we can just get an extension, and when he requested the extension, the seller said no and now is charging $150 a day past scheduled escrow date, not to mention now we're paying 5% interest as opposed to 4.5%, $100 more a month in interest fees alone.
This basically turned into a cluster and I just want it over at this point. I have contemplated just saying "screw it" and dropping the whole deal even if it means I'm out my deposit of $7k
While I'm the 'screw it' sounds somewhat appealing at this point, I think you need to consider the seller could still potentially sue you for more than the $7k, so don't do that.
It' too bad you couldn't hold the seller off for like 3 weeks and start with a professional lender. Sorry to hear how bad it has gone.
Lastly, I would INSIST that any fees you have already paid be credited back at closing (i.e. on the HUD).
While I'm the 'screw it' sounds somewhat appealing at this point, I think you need to consider the seller could still potentially sue you for more than the $7k, so don't do that.
It' too bad you couldn't hold the seller off for like 3 weeks and start with a professional lender. Sorry to hear how bad it has gone.
Lastly, I would INSIST that any fees you have already paid be credited back at closing (i.e. on the HUD).
Well apparently the seller has another cash offer that's higher than what we offered as a back up so they're trying everything they can to push us out of this one. So I'm pretty sure they wouldn't sue me if I call off the sale. I'd just be out $7k.
I'm going to call the title company on Monday to get an official breakdown of all the questionable costs. Still waiting to hear back from the underwriter if everything is good to go. I'm HOPING today's the day. If I have to write one more LOE....lol
Thank you for taking a look smartmoney, really appreciate it. So if I'm understanding correctly, you're saying the $3,362.25 charge on line 1001 is a reserve fund to pay any cost associated w/ the property? Yes, think of it as an expense checking account and that will be much more palatable for you.
I'm just confused because initially they gave us a GFE/HUD statement like this and it didn't have that charge on there. Basically the closing cost went up approx $3,000 which is why I'm concerned and frustrated at the officer for not explaining the difference from the original estimate. Look in box 9 of the GFE - is there nothing there?
EDIT: The officer has been in the business for many years. Her husband is our agent who again has been in the business for some 30yrs or such. Maybe that's the problem right there...I'd figure it'd be easier having a husband/wife team but nope. Age old problem, taking the customer for granted and how you got to that loan officer. Shame on that agent, but I'm betting no one has told him this....it's not real easy to criticize someone's partner and come away unscathed. Or at least without them viewing you as attacking them personally. In this case, and it shouldn't fall on you, the agent's broker would (or should) be appreciative of an anonymous complaint. You could claim "now that several months have passed......you feel comfortable pointing this out." It really is not your problem, but it will be someone else's.
So if everything looks ok, looks like I have to call the title company to get an explanation and breakdown of the tax charges since that's what the officer tells me they are on line 1001. Yes, that would be advisable.
Also I will start to get charged on the actual close date, not the contract close date correct? Yes, the actual close date, including the day you close.
We were scheduled to close on 8/21/14(yesterday) but looks like it won't be done until Monday at the earlier, so the actual charges should be from 8/25/14?
And you are correct, I'm an engineer and trying to understand all this with no one explaining it is driving me nuts! (LOL, you don't say. Again, shame on the loan officer for not fine-tuning her communication skills and understanding various personalities and their preferences of communication and details. This is sales 101, any field, anywhere). I find it ridiculous that officer and lender expects us to just sign off on everything without understanding where all these costs are coming from! If I'm going to literally write off the next 30yrs of my life for a huge chunk of money you bet I want to know what every cent is paying for!
This has been a very trying ordeal as I did have a difficult loan situation so I can understand this isn't exactly easy for the loan officer, however things would go a lot smoother if she explained things for me. I have another property that basically my parents are paying for, and that's what causing majority of the issues.
I just want it all to be over....I will probably write up a detailed explanation of the whole process when this is all over.
See above in red - good luck, don't let them box you in or make you feel you have to heel or they are going to sell right from under you. They know darn well, you would have to sign a release and you could tie that property up for months, if you hand the inclination. Don't be bullied and if they do try that tactic, you do need to go to the real estate agent's broker.
See above in red - good luck, don't let them box you in or make you feel you have to heel or they are going to sell right from under you. They know darn well, you would have to sign a release and you could tie that property up for months, if you hand the inclination. Don't be bullied and if they do try that tactic, you do need to go to the real estate agent's broker.
I finally got a chance to contact the title company, and they said they have nothing to do with the HUD statement. After much call transferring and explaining the situation multiple times finally ended up calling the escrow company and they were able to help me out who was much more helpful than the loan officer.
So I found out that the $3,365 charge is for impounded taxes like the loan officer said. However, she said she doesn't know the specifics since it's the lender that comes out with the charge for it. Do you know in general how lenders calculate taxes? And in your experience when buyers impound taxes, do they end up paying more than the actual tax amount? I can't imagine the lender underestimating the tax, but can definitely imagine them overestimating the tax.
In case they do over/underestimate taxes, do they give a refund or a bill to pay for overage/underage at the end of the year?
How the escrow officer explained it is that they have a formula to calculate the taxes based on property value, and trends and what not and come up with a monthly figure that is rolled into the mortgage that never changes even the tax may change. So in my mind someone is going to be shorted, whether that's the lender(not likely) or me.
A tiny bit of hope is that they expect everything to be approved today and order the loan docs today. Given all that's happened, I'm not holding my breath lol
I finally got a chance to contact the title company, and they said they have nothing to do with the HUD statement. After much call transferring and explaining the situation multiple times finally ended up calling the escrow company and they were able to help me out who was much more helpful than the loan officer.
So I found out that the $3,365 charge is for impounded taxes like the loan officer said. However, she said she doesn't know the specifics since it's the lender that comes out with the charge for it. Do you know in general how lenders calculate taxes? And in your experience when buyers impound taxes, do they end up paying more than the actual tax amount? I can't imagine the lender underestimating the tax, but can definitely imagine them overestimating the tax.
In case they do over/underestimate taxes, do they give a refund or a bill to pay for overage/underage at the end of the year?
How the escrow officer explained it is that they have a formula to calculate the taxes based on property value, and trends and what not and come up with a monthly figure that is rolled into the mortgage that never changes even the tax may change. So in my mind someone is going to be shorted, whether that's the lender(not likely) or me.
A tiny bit of hope is that they expect everything to be approved today and order the loan docs today. Given all that's happened, I'm not holding my breath lol
It sounds like your area uses different lingo than mine, in my area, the title company and the escrow company are the same company. So that threw me a bit. We also have escrow accounts, not impound accounts for taxes and insurance, but I'll try to use your lingo so as not to confuse you.
Here is how the impound accounts work:
You have your normal payment, that is your principal and interest. That part of your payment never changes, assuming you don't refi the loan and you are a fixed mortgage.
Then you have the impound portion for taxes and insurance. That part is regulated. Your bank guesses at what your taxes and insurance will cost for next year, adds those two numbers together and then collects 1/12th of that amount each month. When the taxes and insurance are due, they make those payments for you.
Once a year (not necessarily at the end of the year, it could be on the anniversary date of when you buy the house, or some other date, mine is always in December though), the bank is required to review the impound account. They look at the lowest balance the impound account reached for the year (most likely 5 minutes after they paid the taxes). That minimum is supposed to be not more than 1/6th of your taxes and insurance for the year. In reality, they calculate over/under compared to exactly 1/6th. If they undercharged you (the minimum was lower than 1/6th), they make an adjustment and your overall payment goes up for the next year (or you can choose to send a check for the shortage. If they overcharged you (the minimum balance was over 1/6th), your payment goes down for the next year (or you can opt for them to mail you a check for the overage). I believe there is a limit where if it went up or down a lot, they have to mail a check, or get immediate payment, but I'm not 100% sure of this.
If the home is new construction, it is much more complicated, but it doesn't sound like this is.
So your Principal and interest stays the same for the life of your loan, but the impound portion changes, typically once a year. Mine has fluxuated within a $50 range for the 11 years I've owned my house, but I've heard some people whose payment varied by hundreds of dollars depending on tax and insurance increases.
You don't pay any more or less than you would have if you paid directly to the county or insurer. Other than one thing. The impound will pay the minimum each time it is due. So taxes might be every 6 months (that's what it is in most areas). Some counties give a discount if you pay the whole year at once, and you wouldn't get that discount. But most people don't pay for the whole year at once anyway.
My question is this: You said the $3300 wasn't listed on the GFE. Did the lender say they weren't going to be impounding the taxes and insurance, and so listed $0 on that portion? It has to have said something in section 9.
*Edited to add: If 1/6th of your taxes are $3365, that means your annual taxes (or possibly taxes plus insurance) are over $20k. To me, that's insane. Do you know if that is right? If they are collecting an entire year's worth of taxes up front, and collecting every month, they are going to have way too much money at their review and you should get a large check back.
Thank you for the detailed explanation Lacerta. That really cleared things up for me.
The $3300, wasn't on the initial GFE they sent out almost a month ago when we went into escrow. There was no mention of impounding or anything. Basically we were planning on doing a 80/10/10 loan which didn't require impounding and then that changed due to the seller trying to push us out of contract so we ended up doing 90/10 which required impounding.
Now to make this already frustrating exercise even worse, I just got word that the underwriter is not excluding my parents property which is under my name on the note, but has my dad's and my name on the deed. Apparently the underwriter wants someone else's name on the note as well. My loan officer is saying that they don't require the note to be under other person's name as well, so is surprised by this decision by the underwriter. I don't know who to believe anymore, either way at this point I've had had it.
We have one last ditch effort to see if my wife's secondary job will suffice to lower the DTI enough for the underwriter to sign off on, but honestly I've kind of written the property off in my mind.
I need to begin making peace about losing my deposit, plus all the money spent on inspection and appraisal.
I'm so angry that I don't care anymore.
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