Mortgage Fine Print: Post-Closing Problems

by Nichole T. in Nebraska and by Dianne in New York

Ask Kate about mortgage fine print: Post-closing problems are traumatic to borrowers. Sometimes, as in the case of Nicole, home buyers have already moved into their houses when asked by lenders for more money. Other times, it's a matter of not understanding mortgage terms clearly, as in the case of Dianne, who asks if mortgage insurance will pay off a loan after a borrower's death.

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Mortgage Company Requires More Money Down 30 Days After Closing

By Nichole T. in Nebraska
Mortgage Company Requires More Money Down 30 Days After Closing

Kate,

I live in a wet funding state. We purchased a new home and obtained a mortgage. At closing, we brought the required funds and did everything requested. Signed all docs and received our keys. We moved in and began renovation work on the kitchen.

Last week our mortgage company called and asked us to get a cashiers check for $350, stating that our HUD statement was miscalculated and that we needed to be more vested in the purchase.

My take on this is, too bad. They told us what they expected to bring, we brought it. They accepted it. We signed, they agreed. Done.

Problem is now they can't sell their loan and they don't want to hold it.

So? Am I obligated to pay this additional amount? Sorry for the mistake, but they could have told us to bring any amount they wanted before hand. We contractually agreed to do what we did. Are they breaching contract to redo the HUD now and require something else?

Thanks for your help. At this point I don't think there is anything else they can do to us, is there? I mean we actually live and have lived here for over a month. Can the call the note due or anything else?

Thanks,
Nichole T.

***zz-portrait-left.shtml*** Ask Kate answers: Mortgage Company Requires More Money Down 30 Days After Closing

Hi Nichole,

I suggest that you peruse your final loan documents for verbiage that obligates you to cooperate with a post-closing request for additional paperwork and/or funds.

You might discover that your lending institution slipped this fine print into their docs that you signed and dated.

But assuming there is no lender-verbiage to that effect, be thorough and check Nebraska's state website for statutes that require you to fork over post-closing funds upon a lender's request.

Wet Funding vs Dry Funding

In states that use the quicker wet-funding procedure (often referred to as table-funding), final documents for the home buyer and seller are signed and funds are typically disbursed on the same day.

In dry-funding states (common in the western portion of the United States), final documents are signed and sent back for a lender review before disbursing funds, usually a day or more later.

Getting Local Mortgage Help for Post-Closing Problems

Another thought is to call the agent responsible for closing your mortgage transaction and ask how often they see this issue with the specific lender and if they'd get involved on your behalf. Often in wet-funding states, this is an attorney while in dry-funding states, an escrow company.

At that point, you will have to weigh in on the situation, for example... how much is the bank harassing you and how much do you think you are in the right. You don't want to play hardball and end up having a fight cost you more than $350.

Jack Lost $2500 in Lender Credits

You will also relate to Jack who is left asking where the difference between the lender credit and his closing costs went. With no explanation, $2500 simply seems to have disappeared. Read the rest of his story at Refinance Fees: Where Did My Lender Credits Go.

Best wishes,

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LPMI or BPMI: Are There Post-Closing Benefits

By Dianne in New York
LPMI or BPMI: Are There Post-Closing Benefits

Hi Kate,

Does LPMI or BPMI cover the mortgage in case of death?

If not, please explain its function.

Thank you,
Dianne

***zz-portrait-left.shtml*** Ask Kate answers LPMI or BPMI: Are There Post-Closing Benefits

Hi Dianne,

Here's what private mortgage insurance WILL NOT DO for you. It will NOT pay off your home in the event of your death, loss of job, long-term illness, or a host of other calamities that could potentially put you behind on mortgage payments and start foreclosure proceedings.

But here's what private mortgage insurance (LPMI and BPMI) WILL DO for you! It allows you to buy a home without a 20 percent down payment. Many borrowers choose to pay the MI premium vs risking an increase in real estate prices and mortgage rates while saving the down payment.

Borrower vs Lender Paid Mortgage Insurance

BPMI stands for Borrower Paid Mortgage Insurance and LPMI stands for Lender Paid Mortgage Insurance.

I explain the difference between the two types of mortgage insurance at Lender Paid Mortgage Insurance for HARP Refinance and When Lender Paid Mortgage Insurance Is Clear as Mud.
You can also read my more in-depth description of private mortgage insurance at What Is PMI.

Best wishes,

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