Lender screw-up? HUD-1 and PMI - Is this normal? (loan, rate lock, re-finance)

[like-2-hike]

Closed on a re-finance recently. The HUD-1 stated it was a conventional uninsured mortgage (I assume - the conv. unins. box is checked on page 1) with no PMI. Everything I signed was to that effect, although other paperwork included in the loan package included an amortization schedule with PMI listed. The home has a 90% LTV, so I was surprised when the closing docs noted it was being handled as an uninsured conventional mortgage.

The original loan was paid off a week ago. Around that same time I received a statement identifying where and when payment should be made and in what amount.

Today I received another statement noting that I would need to add $XXX for PMI each month. This is simply a letter - not any formal document, and not a revised HUD-1.

I was under the impression that the HUD-1 was kind of a legally-binding document that outlined the terms of the loan. Am I wrong? I'm inclined to tell the lender they'll get exactly what was outlined and agreed to on the final HUD-1, but that might be unwise. Thoughts?

Complicating matters slightly is that a second home is currently going through the re-fi process with the same lender...

[399083453]

No one can answer this except your lender. Call them.

[FalconheadWest]

I'm sure you probably signed something about errors and omissions and if something was wrong in the paperwork, that you would work with them to correct it. They've obviously made an error and they're correcting it. You need to call them and figure it out. What does your GFE say as that's going to answer most of your questions.

[SmartMoney]

What really matters is your initial Truth in Lending, your lock-in Truth in Lending, and your HUD I Truth in Lending. If those documents left it off, you could very well could get a free ride. If it looks like the terms changed after you agree to move forward, you were given false information to apply for a loan. However, if that PMI has always been there and it was a typo at closing, you need to fix it and move on.

[like-2-hike]

Hi guys - thanks for the responses. I received two GFEs - the first one did not have PMI, the second one did (I didn't notice the PMI on the second because the only thing that was supposed to change between the two GFEs was the rate and points - the second GFW was simply confirming the rate lock). The pre-settlement and post-settlement HUD-1s don't show PMI.

Not sure that really clarifies the situation at all. I don't know if the GFE or HUD-1 is the "truth in lending" or not - can you clarify, SmartMoney?

[SmartMoney]

Google "truth in lending disclosure form" and you will see the document I am referring to.

When you went from no PMI to PMI on the GFE was there a change of value from the appraisal? (Known as a "change of circumstance" and allows the lender to now add in PMI, provided they redisclose immediately). However, if they missed the PMI within 72 hours of finding out the revised value, they could be on the hook for munching a bunch of PMI.

If in doubt, bundle up your GFEs and upload them to the CFPB and explain what you said here. The GFE history is critical. If it was a disclosure error, you caught a break. If its a mistake on something previously disclosed, you must comply with their request. Definitely worth looking into.