Home Buying in 11756>Question Details

Edster, Home Buyer in Brooklyn, NY

My sister just closed on a home and the numbers were way off, she never got a HUD/closing settlement and nothing notarized at all. is this illegal?

Asked by Edster, Brooklyn, NY Thu Sep 17, 2009

When she asked the realtor for one she was emailed a WORD document that to me looks nothing like a HUD. She also never got a good faith estimate. The difference in what they originally told her and the "new" figures hours before closing are upwards of $8,000. This is in Long Island, NY

What can she do to see if she got ripped off and is there any chance she actually doesnt own the home??

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8
Robin Silverberg’s answer
I know this is an old question, but it seemed that no one answered her question. From the figures that you typed in, which seems to be her attorney's closing statement, it looks like she went to a company called Mortgage One, who brokered her loan to Bank of America. The lender fees are for underwriting, tax service, flood certificate, per diem interest and escorws for property taxes and homeowner's insurance. The amount that seems high, which may not have been disclosed to her in advance, is the Broker Fee to Mortgage One, which looks like a total of around 3 points.
Hypothetically, the new GFE is supposed to stop this kind of thing from happening. The problem that I see is that the kind of people that would have charged her 3 points on this loan are not working for the reputable companies, and may still be doing this same kind of thing. I am not going to say that charging as much as they did is a RESPA violation, because the reality is that it is not. It is in the range that can be charged. The problem is that the government allows this. It is one thing to say that the costs of doing a $50,000 loan would warrant that number of points, but to see it charged on a loan like this, not to mention the fact that they probably also got a yield spread premium from Bank of America, should be criminal. What she can do to get her actual HUD1 is to contact the bank attorney who closed the loan and ask for it. She could also get it from Mortgage One.
0 votes Thank Flag Link Mon Jan 11, 2010
Was she represented by an attorney?
0 votes Thank Flag Link Mon Jan 11, 2010
Thank you all for your replies. I wanted to add that this RE is kind of "family" so they're stepping lightly trying to resolve this with her. I wanted to post what was sent as "closing statement". She is supposed to drop off the HUD (which I thought were one of the same) today 9/18/2009.

Can anyone tell me if the following "closing statement" makes sense? Also, notice the Lender Fees (around $3,800) is that REALLY high? She has a paper that says bank fees were $690.00 (BTW yes she is in the home doing extensive renovation).

-------------------------------------------------------------

The following is your closing statement for the purchase of your residence located at the premises indicated above, as of August 10, 2009

CREDITS TO SELLER
Purchase Price $293,550.00
Fuel 459.02
Real Estate Tax Adjustment (pro rata 9/11/2009 – 12/31/2009) 577.00
School taxes (pro rata 9/10/2009 – 9/30/3009) 240.00
Transfer Tax Credit ($285,000.00) 34.20


TOTAL $294,860.22

CREDITS TO BUYER
Downpayment $ 25,000.00
1st Net Mortgage Proceeds (Purchase Money) 243,855.04
Property Disclosure Credit 500.00
Sellers Concession 8,550.00
TOTAL ($277,905.04)

ADJUSTED NET DUE SELLER $ 16,955.18


CHECKS PAID BY PURCHASER $ 16,955.18
Certified to name taken out $16,955.18




ITEMIZED BREAKDOWN:

CHECKS PAID BY PURCHASER OUT OF MORTGAGE PROCEEDS
$264,195.00
1. Equity Settlement Services, Inc. (Title Costs) ($ 7,809.56)
2. name taken out (Bank Attorney) ($ 500.00)
3. Lender Fees (Bank of America) ($ 3,869.72)
4. Mortgage One (Broker Fees) ($ 7,694.88)
5. name taken out (Buyer’s Attorney) ($ 465.80)

TOTAL $20,339.96
Net Mortgage Proceeds Paid to Sellers $ 243,855.04

--------------------------------------------------------------------
0 votes Thank Flag Link Fri Sep 18, 2009
First off, she should have definitely gotten a good faith estimate. It's required by law. The HUD1 statement is needed to get the loan funded. Her lawyer should have the HUD1. Get him/her to send it to your sister. Is she living in the house? If so, I can't imagine that the seller(s) and their attorney went along if it was a scam. Have her go to the township in which the property is located and check to see if the deed has been recorded. The mortgage broker will almost certainly claim that your sister was given the good faith estimate. She could probably get in touch with the New York State Banking Commission about this. Good luck.

Ralph Windschuh
Century 21 Princeton Properties
631-467-0009
rwindschuh@c21princetonproperties.com
0 votes Thank Flag Link Fri Sep 18, 2009
Ed - you can't close without a HUD. A loan cannot be funded without one.

I advise all my buyers to check with the township they purchased in a few weeks after closing to make sure the title company who handled the closing did it's job correctly in filing the ownership info with the town.
0 votes Thank Flag Link Thu Sep 17, 2009
I should've mentioned, the RE, loan people AND lawyer are the same firm
0 votes Thank Flag Link Thu Sep 17, 2009
Why did the Realtor not refer her back to her attorney? Where was her attorney during all of this? Attorneys run these shows and are responsible and the Realtor should be making sure the attorney is deliverying.

Your sister should have received all of these docs at the closing? I would get on this immediately!
Web Reference: http://GailGladstone.com
0 votes Thank Flag Link Thu Sep 17, 2009
Why did the Realtor not refer her back to her attorney? Where was her attorney during all of this? Attorneys run these shows and are responsible and the Realtor should be making sure the attorney is deliverying.

Your sister should have received all of these docs at the closing? I would get on this immediately!
Web Reference: http://GailGladstone.com
0 votes Thank Flag Link Thu Sep 17, 2009
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