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Old 07-29-2008, 09:58 AM
 
Location: New York City
1,836 posts, read 2,834,804 times
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Purchaser gets sellers consession for closing costs. lender puts point (buy down) on HUD but does not use funds to buy down point and agrees to refund to borrower post-closing.

after closing, lender doesn't refund point to borrower using excuse to the effect of "my bad, we can't do that".

what should borrower do?

Last edited by BK2Westchester; 07-29-2008 at 10:12 AM..
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Old 07-29-2008, 10:27 AM
 
Location: West Michigan
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Borrower should have got it in writing.

Kind of sketchy on the details as well, hard to come up with a good answer with the information given.
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Old 07-29-2008, 10:36 AM
 
Location: New York City
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Quote:
Originally Posted by Bydand View Post
Borrower should have got it in writing.

Kind of sketchy on the details as well, hard to come up with a good answer with the information given.
What other details do you need?

As far a getting it in writing, the HUD is in writing. There is also nothing indicating the interest rate was paid down, yet the buy-down point is on the HUD.
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Old 07-29-2008, 10:54 AM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,100,590 times
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Quote:
Originally Posted by hoodwinked View Post
Purchaser gets sellers consession for closing costs. lender puts point (buy down) on HUD but does not use funds to buy down point and agrees to refund to borrower post-closing.

after closing, lender doesn't refund point to borrower using excuse to the effect of "my bad, we can't do that".

what should borrower do?
If the buy down point was on the HUD and the rate does not match the bought down rate, contact your state banking or mortgage division. As far as being refunded post-closing, it is illegal for the borrower to receive anything above the earnest money back in a purchase transaction.
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Old 07-29-2008, 11:11 AM
 
Location: New York City
1,836 posts, read 2,834,804 times
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Quote:
Originally Posted by Daddys///M3 View Post
If the buy down point was on the HUD and the rate does not match the bought down rate, contact your state banking or mortgage division. As far as being refunded post-closing, it is illegal for the borrower to receive anything above the earnest money back in a purchase transaction.
Thanks.

Notwithstanding the fact that I can't get the refund based on your response, will reporting it force them to lower my rate post-closing? If so, what if the mortgage was already sold?
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Old 07-29-2008, 11:34 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,101,195 times
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I don't think it's illegal if the bank agrees to it.

If the seller was paying 5,000 at closing, but the closing costs was 3000....then he walked away with an extra 2,000 in his pocket.

I don't see what does has to do with the bank. It is the lender's responsibility to use up the whole 5,000, but if they didn't then you lost the money.

Quote:
Originally Posted by hoodwinked View Post
Thanks.

Notwithstanding the fact that I can't get the refund based on your response, will reporting it force them to lower my rate post-closing? If so, what if the mortgage was already sold?
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Old 07-29-2008, 11:54 AM
 
Location: New York City
1,836 posts, read 2,834,804 times
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Quote:
Originally Posted by renriq02 View Post
I don't think it's illegal if the bank agrees to it.

If the seller was paying 5,000 at closing, but the closing costs was 3000....then he walked away with an extra 2,000 in his pocket.

I don't see what does has to do with the bank. It is the lender's responsibility to use up the whole 5,000, but if they didn't then you lost the money.
maybe you mis-read the original post because your repsonse does not address the question.

the $5000 seller concession was fully added onto the HUD with various fee's (including paying down the point-which wound up not happening). True fee's were only about $3000 because the lender didnt apply the point to buydown the rate as disclosed on the HUD. That 2K is just sitting in their coffers.

Does the lender majically make an extra $2000 they collected to buy-down the rate or should they refund it to the borrower (who is paying interest on it!). CAn the borrower demand getting the buydown rate? Should the money go back to the seller?

this is all post-closing.

thanks
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Old 07-29-2008, 12:06 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,101,195 times
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Hmmm

If the HUD states 5,000, and the TOTAL closing costs is 3,000....then the seller gets to keep the 2,000.
If the lender didn't put the extra fee for discount point then you're out of luck because the seller gets to keep the extra money.

If the HUD states 5,000, and the TOTAL closing costs is 5,000...and there is no discount point listed on the HUD, then you now know why the discount point wasn't added. There wasn't money left.

If the HUD states 5,000, and the TOTAL closing costs is 5,000 AND there is the discount point, then you need to do this:
1. Look at your Good Faith Estimate to see the total fees at the bottom, and look to see if the discount point is there
2. Look at the date when your rate was locked. Rates change everyday, and the rate you was quoted might have gone up.

Your rate lock agreement should tell you if it included the point or not.

Quote:
Originally Posted by hoodwinked View Post
maybe you mis-read the original post because your repsonse does not address the question.

the $5000 seller concession was fully added onto the HUD with various fee's (including paying down the point-which wound up not happening). True fee's were only about $3000 because the lender didnt apply the point to buydown the rate as disclosed on the HUD. That 2K is just sitting in their coffers.

Does the lender majically make an extra $2000 they collected to buy-down the rate or should they refund it to the borrower (who is paying interest on it!). CAn the borrower demand getting the buydown rate? Should the money go back to the seller?

this is all post-closing.

thanks
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Old 07-29-2008, 12:13 PM
 
Location: New York City
1,836 posts, read 2,834,804 times
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Quote:
Originally Posted by renriq02 View Post
Hmmm

If the HUD states 5,000, and the TOTAL closing costs is 3,000....then the seller gets to keep the 2,000.
If the lender didn't put the extra fee for discount point then you're out of luck because the seller gets to keep the extra money.

If the HUD states 5,000, and the TOTAL closing costs is 5,000...and there is no discount point listed on the HUD, then you now know why the discount point wasn't added. There wasn't money left.

If the HUD states 5,000, and the TOTAL closing costs is 5,000 AND there is the discount point, then you need to do this:
1. Look at your Good Faith Estimate to see the total fees at the bottom, and look to see if the discount point is there
2. Look at the date when your rate was locked. Rates change everyday, and the rate you was quoted might have gone up.

Your rate lock agreement should tell you if it included the point or not.

my rate-lock was good thru the closing date with no buy-down. thats the rate I got on my mortgage. good faith estimate does not show buy-down.

so either i should have gotten a better rate or the seller should have walked away with the extra $2000 (which is fine with me)

As it is, the seller did not get the 2K and i did not get the better rate. The 2K is sitting with the lender.

Now what?
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Old 07-29-2008, 12:17 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,101,195 times
Reputation: 1008
How do you know that lender is holding the extra money?
Did the attorney tell you this?

Did the lender credit the 2,000 towards your loan amount?

The attorney has to justify all fees/costs/monies on the HUD.
The only way the lender is 'holding it' is if they applied it to the loan amount as a down payment.
It should've went to the seller not the lender.

If you say the lender is 'holding it', then they would need to apply it to your loan amount.

Quote:
Originally Posted by hoodwinked View Post
my rate-lock was good thru the closing date with no buy-down. thats the rate I got on my mortgage. good faith estimate doe snot show buy-down.

so either i should have gotten a better rate or the seller should have walked away with the extra $2000 (which is fine with me)

As it is, the seller did not get the 2K and i did not get the better rate. The 2K is sitting with the lender.

Now what?
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