Pay off late...closing agent dishonest...RECOURSE? - Posted by Krista (WA)

import · November 24, 1998, 11:22am

Posted by Krista(WA) on November 26, 1998 at 19:20:34:

I really appreciate your additional comments. We did sign a recission form. I believe the deadline for us was the 30th. When I return from our Thanksgiving trip on Monday, I plan to do some more checking on this whole thing. What a pain. :[ I didn’t call anyone back on Tues. because I was tired of dealing with it and had to get ready to leave for our relatives. I wouldn’t want to involve an attorney - you’re right, not worth it. But I just wondered if there’s any point to me standing firm about either the closing co or the lender righting this for us… or if it’s going to just be one of those things where it’s in fine print somewhere that they don’t make any promises regarding pay-off date. I guess I’ll find out soon enough… :{

Thanks again for your input. HAPPY THANKSGIVING! I’m going back for pie now.

Krista

import · November 24, 1998, 11:22am

Pay off late…closing agent dishonest…RECOURSE? - Posted by Krista (WA)

Posted by Krista (WA) on November 24, 1998 at 12:22:47:

Hello everyone,

I haven’t posted in quite a while… been busy with our other business for the last couple months. My husband and I recently refinanced our home. I found out yesterday that the payoff was a day late, and because of that (it’s an FHA) we paid an extra month’s interest (over $500!). Nothing was ever said to us about it. The closing statement we signed shows the proper payoff, but the one mailed to us (the final) shows the higher payoff, but with no explanation. I found it on accident. I have included my documentation over the past day and a half below. I apologize for the lengthiness, but I’m trying to be thorough. My question is, does anyone know if I have any recourse against the closing company or the new lender/loan officer? If so, any suggestions on how I should proceed from here? I don’t particularly want to confront or deal with the closing agent anymore, because I think she will try to solidify her story better. I don’t know who to trust if I ask to speak to someone above her. I don’t even know if I should trust my loan officer to be completely honest with me. I’m fairly certain that there is a cover-up going on (or at least there was until it was clear I wasn’t going to give up), I just don’t know who all was in on it. When the borrower is told that we will close by a deadline, and understands that deadline is going to be met, is there any accountability on anyone’s part to meet that deadline???

My notes:

11/23/98 -Called closing agent to find out how to get 2nd half prop taxes back since, as I remembered, it had been held by Closer AND I recently found out through a statement from my previous mortage co, had also been paid by Principal Res. Cynthia told me, after pulling my file, that it looked like she had just ?held? it back, and once it was confirmed that it had been paid, it went to reduce new principal w/ Chase. That amount, she said was 251.87. I wrote it down.

I hung up and realized that the amount for taxes was 535.66, not 251.87 as she said, so I called back. She said that no, the 251.87 was what was due back to us, but since we couldn?t recv funds at closing with this loan, that it was applied to our new principal w/ Chase. She told me that the taxes were 535.66, and that was never included in the total funds disbursed, only that she had to show it on the settlement as Held out in case it had not been paid yet. I thought I fully understood now.

I hung up and noticed, after adding the totals that the tax figure WAS included in the total on the estimated settlement statement. I found the ?final? settlement statement that was mailed to us. I wanted to make sure that the total loan amount (payoff plus settlement charges) was reduced by the taxes amount on the final statement. The totals on the two statements are identical. HOWEVER, the settlement charges were increased from 2,817.92 to 2,819.01 I looked to see that that was due to an increase in line 811 ?Principal Reduction/New Loan to Chase Manhattan Mortgage.? I don?t know what that is for, or why it was different on the new statement. I then realized the payoff to Principal Res was increased from 92,249.42 to 92,783.99 This didn?t make any sense to me. The Taxes line 107 was blank on the new statement, but because of the increase in the other two figures, the total was still exactly the same. I then looked up the notes I had taken when I called to find out what our payoff amount would be when we started the refi process. My notes showed that the payoff would be 92,211.97 if paid by 11/1. So I called Principal Res to find out why the payoff was so much more than quoted by phone. The rep I spoke to, Linda, explained that because the closing co failed to fund by deadline 11/2 at 2pm, we were charged an additional month?s interest! She said she would not be very happy if she were me, and that the closing co was well aware of the deadline and that it was strange that nothing was said to us about missing it. I AGREE! VERY STRANGE! Why wasn?t it funded on 11/2, as planned and agreed to, and as we understood that it would be. Why was nothing said to us when it wasn?t?

Also, if the new principal w/ Chase was reduced by 251.87, I can not find anywhere on the statement where that is noted. However, that does happen to be the exact amount of the Title insurance. Where did this figure that Cynthia gave me over the phone come from?

I called back to speak w/ Cynthia again. I was told she was on the other line, would I like to leave a msg? No, I said I would try back shortly. I called back 4 to 5 min later, and was told she had left for the day. I thought it odd that she had left that quickly (at 4:22pm), and wondered if she realized I was figuring this out, and wanted to avoid me until she got her story straight. I left a msg for her to call me, and then called our loan officer Katy, to see if she could shed any light on the situation. She said that it was her understanding that we would be funded on 11/2, and that because we signed on 10/27, we should have funded on 11/2. She said she would call Cynthia to find out what the deal was first thing in the morning.

11/24 ? Cynthia called at 8:11am and left a msg saying that she should have pulled my file yesterday when I called. She said that she pulled it now because I left a msg to call her, and she wanted to pull it and see what the problem could be. Now that she was looking at it, she said, there was a note in my file regarding the payoff. She said that because they did not recv the funds from Chase until 1:30, they did not get it in time to wire the payoff to Principal the same day because they are 3 hrs ahead of us. She said that when they tried to wire it at 1:30, it was after 2pm at Principal, and so they added another month?s interest to the payoff. So that is where our refund (presumably of the taxes)went ? to our underlying mortgage instead of to our new principal w/ Chase. She ended her msg with ?So I thought you should know that?? She?s right, we should have known it when it happened! And if she supposedly didn’t pull our file yesterday when I called, where on earth was she getting the information and figures she was giving me?? This is one big cover-up, for a series of dishonest decisions regarding our closing? obviously originating from SOMEONE messing up and not getting it paid in time.

Thanks in advance, to anyone who made it all the way through that and cares to respond!

Krista

import · November 25, 1998, 11:37am

Re: Pay off late…closing agent dishonest… - Posted by JPiper

Posted by JPiper on November 25, 1998 at 12:37:24:

Hi Krista:

It looks to me like you have two separate issues going here.

First, you appear to have a problem with how the settlement statement was calculated. Just so that you know, it’s rare when I can’t find errors on the settlement statement. It’s quite common. You should be able to go down the settlement statement to see if it was calculated correctly. One normal place for errors is calculating prorations incorrectly. Another is to insert incorrect figures. These are easy matters to check. I would do this, and I would do it assuming that the lender didn’t receive the money in time for the cutoff…the first of the month. Just make sure the settlement statement is calculated correctly.

The second issue that you bring up has to do with being charged the extra month of interest. As you know, on an FHA loan interest in not prorated. If you payoff the underlying loan after the 1st you’re stuck. While funds can be wired, typically they need to arrive no later than 2PM because of the bank cutoffs. In order to wire payoff funds, the new lender funds have to be in the title company account. Alot of this depends on when the closing date was, and when the loan was recorded. You don’t mention these details, so it’s impossible to know whether there was an error.

I know none of this is much help. But I wouldn’t assume that evil is afoot here. I would simply check out the details, especially concerning when the closing date and time was. Funds can be wired same day, but they do have to be received prior to 2PM for the purposes of paying a loan off as of a particular date.

JPiper

import · November 25, 1998, 12:24pm

Jim…Re: Payoff - Posted by Krista(WA)

Posted by Krista(WA) on November 25, 1998 at 13:24:40:

Thanks for responding - It was looking like nobody was going to take the time to read my novel.

This is a complicated situation to try to explain briefly in writing. The details you mentioned were in my notes, but I realize they were long and wordy. We closed on the 27th of Oct. The reason why the deadline was 11/2 is because 11/1 was on a Sunday. According to our loan officer, signing on the 27th should have insured funding by the 2nd. That is the main issue - that and the fact that it was never disclosed to us. I’m not generally a distrustful person. The “final” settlement statement came in the mail, well after closing and funding, and the first two pages were attached to the third page which we had signed at closing with the “estimated settlement” which of course had a different payoff. That doesn’t seem right to me, as we never saw this payoff amount when the document was signed. A typed note from the agent was included with a very brief note of thanks, etc. Nothing was said about missing the deadline, and therefore increasing the payoff.

The other issue was what led me to find the payoff difference. When we closed, the agent explained that they had to “hold” money for the property taxes in case they hadn’t been paid by our previous lender yet. When I got a statement from the prev. lender saying that they were paid by them, I was just calling the agent to make sure they hadn’t been paid twice, and that somewhere we were credited or refunded for the money that was “held” for this purpose. When she started giving answers that were confusing and didn’t make sense, instead of giving up, it made me look very carefully at both settlement statements and do some calling. That’s when I figured out what had happened. There wasn’t really a miscalculation - just no explanation of where the excess tax funds went. The 251.87 figure didn’t exist, except for on the line for title ins. I don’t know why she gave me that figure. I can only think she must have pulled it out of the air (best case scenario), or said the first number that she looked at to “answer” my question, and possibly confuse me enough for me to drop the issue (cynical scenario). Regardless, she WAS looking at my file, because she quoted the tax figure and others. So I don’t know why she would say “I should have pulled your file yesterday” when she called back to explain the late payoff was why there was no tax refund or credit. Do you see why I’m suspicious? It looks to me like someone (I don’t know who yet) caused the payoff to be late. Rather than have to tell us this, re-sign paperwork, etc, and risk an ugly situation (because they were SUPPOSED to close by the end of the month - we started this “streamline” refi at the beginning of Oct - there was plenty of time!)with us… the closing agent decided, or was told by someone else to simply mail off the final statement, and hope we didn’t notice. After all, if the total was still the same, we probably wouldn’t notice - and we didn’t. They didn’t realize that I would remember that tax money that I was told was being held. When I called to find out where it was, the reason why she couldn’t adequately explain where it was, is because it was used up to pay the extra interest. When it was clear that I was figuring it all out, THEN we were told what happened as an afterthought, as if it was no big thing.

What I’d really like to know is - aside from the possible dishonesty issue - when a loan officer/lender or closing co. says they will close/fund by a deadline, are they responsible to do that?! If I don’t have any legal ground here, then it’s pointless to go round with them about it!

Thank you so much for sticking with this. If you, or anyone else has anymore input, I’d appreciate it!

Krista

import · November 25, 1998, 1:01pm

Re: Jim…Re: Payoff - Posted by JPiper

Posted by JPiper on November 25, 1998 at 14:01:53:

Krista:

Thanks for the additional detail.

It sounds like someone could have fouled up…but it’s difficult to tell who. Certainly on the surface of it, if you closed on October 27 there should have been more than enough time to have funded and forwarded payoff funds prior to 2PM on November 2. Either the title company didn’t do their job correctly, or your lender didn’t forward the funds on a timely basis to the title company.

One other issue that occurs to me as a possibility. In my state there is a right of recission regarding refinances. If I remember correctly that period is 4 days. If that’s the case in your state, that may be the problem. Your new lender wouldn’t have forwarded funds to the title company until it was too late for a timely payoff.

I would continue to check this out until you have received a reason as to why a loan that closes on the 27th didn’t fund on a timely basis. Whether you have legal recourse against the lender I would question. Title companies in my experience have been willing to make their mistakes right. Of course, to involve a lawyer may cost more than what you can hope to win.

Having said this I would continue to search for the where the problem was. I would check that right of recission that I mentioned.

JPiper