What do I do if I believe my lender is requiring too much money to be held in my escrow account?
If you believe your lender is requiring too much money in your escrow account, you should write a “qualified written request” to your lender and ask for an explanation. If you do not get a satisfactory answer from the lender, you may wish to file a complaint with State or Federal institution regulators or with HUD (the U.S. Department of Housing and urban Development).
My lender is supposed to pay my hazard insurance, but I received a notice from the insurance company that it was not paid and my insurance is going to be cancelled. What should I do?
You should contact your lender immediately and send a copy of the bill. Some lenders list a special address and/or FAX number for insurance and tax bills. Keep checking with the insurance company and lender to make certain the bill is paid. You may wish to pay the insurance company directly to avoid cancellation of your policy and then seek a refund from your lender. Keep copies of all your correspondence and payments.
I got a notice from the county that my lender did not pay my taxes on time and the county is assessing a penalty. Do I have to pay this bill?
Send the bill to the lender. The lender should pay the penalty for failing to pay the taxes on time as long as you were current in your mortgage payments. If the lender refuses, you may wish to file a complaint.
I have a question about a payment out of my escrow account. I have contacted the lender several times, but have not gotten a response. How can I get my lender to answer my question?
You should make a “qualified written request” to the lender. Federal law requires that the lender acknowledge your complaint within 20 business days and try to resolve your complaint within 60 business days. If you don’t get a response from your lender, you may want to complain to State or Federal financial institution regulators.
If I decide to file a complaint against my lender, where should I send it?
Director, Interstate Land Sales, RESPA Division Office of Consumer and Regulatory Affairs, US Department of Housing and Urban Development, Room 9146, 451 7th Street, SW, Washington, DC 20410.
When can I stop paying my private mortgage insurance?
The PMI Act will enable homeowners with new loans originated after July 29, 1999 and who meet specified requirements to have their PMI cancelled. If your loan was issued before July 29, 1999, CONTACT YOUR MORTGAGE LENDER FOR FURTHER INFORMATION ON CANCELLATION OF PMI. The law provides 2 situations in which borrower-paid PMI may be cancelled – it can be automatic or by request.
- In general, when the homeowner’s equity position reaches 22 percent of the original value of the property, the mortgage servicer must automatically cancel the PMI. The borrower must be current in making payments for automatic cancellation to apply. Different requirements exist for “high risk mortgage loans”, as defined by government-sponsored entities (i.e., Fannie Mae and Freddie Mac).
- By Request. Homeowners can request cancellation of the PMI when their equity position reaches 20 percent of the original value of the property if they meet certain criteria.
PMI ENFORCEMENT AGENCIES
Office of Thrift Supervision
Division Of Consumer and Civil Rights
1700 G Street, NW
Washington, DC 20552
Toll free: 1-800-842-6929
Comptroller of the Currency Compliance Management
250 E Street, SW
Mail Stop 309
Washington, DC 20219
Toll free: 1-800-613-6743
National Credit Union Administration
1175 Duke Street
Alexandria, VA 22314-3428
The Federal Reserve Board
Division of Consumer and Community Affairs
20th and C Streets, NW
Mail Stop 801
Washington, DC 20551
- Do keep making your mortgage payment on time, even if you have sent a complaint to your lender.
- Do forward any tax or insurance bills you receive immediately to your lender (if the lender is supposed to pay the bill).
- Do check your annual escrow account statement for mistakes.
- Do make a “qualified written request” when asking your lender for information or making a complaint.
Home Closing Information and Disclosures
First, the disclosures:
We are allowed to represent both the buyer and seller at a real estate closing as long as the terms of the transaction have been agreed upon in the sales contract and the parties’ interests are generally aligned. In representing you as the buyer, we will be rendering an opinion on the title to the property you are buying, preparing the written documents, and disbursing the proceeds of the sale. Our representation of the seller will be limited to preparing the deed, collecting the purchase price and drafting the necessary documents that the seller is required to furnish. If a conflict arises, we will withdraw from representing any of the parties to the transaction.
We may have been selected as closing attorneys because we represent the builder who is selling you your house and handle the majority of the builder’s real estate and general corporate transactions. The following are some of the builders whom we represent on a regular or continuing basis:
- Caviness & Cates Developing
- Manns Builders
- Sutherland Builders
- Land Grant Development Co.
- Regency Homes
If you have obtained a loan for part of the purchase price we will also be representing the lender’s interest at the closing by following the terms of the loan instructions that are given to us along with the loan documents. In many instances, your interests are the same as the lender’s: making sure that you are receiving a marketable and insurable title to your real property in accordance with the terms of the agreement you made with the seller.
Using the description of your property from the sales contract, we will perform a title examination so that we can obtain for you and your lender a title insurance policy. It is our practice to try to find an existing policy upon the property you are purchasing if we can locate one through the local title insurance agencies. If we find that a title policy has been issued upon this real property, we will then examine the title to this property from the date of the existing policy. If we cannot find an existing policy, then we will examine the title to the property for the period of time required by the title insurance company. In either case, you will receive the same type of coverage from the title insurance company.
There may be restrictive covenants upon the property you are buying that may restrict your use of the property. The most common restriction limits the size and location of fences in your yard. If you have not received a copy of those restrictions before making the offer on the house, please let us know before the closing if you would like to have a copy provided to you at closing.
Please talk with your real estate agent if you would like a survey of the property you are buying made by a registered land surveyor. In many instances, lenders are no longer requiring surveys. For that reason, unless your sales contract specifically requires the seller to pay for a survey, many sellers or builders are no longer providing them at closing. If that is the case, then we will be happy to order a survey for you at your expense, but you or your real estate agent must specifically authorize our office to do so.
You will be required to obtain homeowner’s insurance upon your home. In many instances, your real estate agent is taking care of this for you; however, if you are handling this yourself, please provide us with the name and telephone number of your insurance agent and company as soon as possible.
In almost all instances, you as the buyer will be bringing money to closing for the payment of your new house. Please note that we must have either cash or a cashier’s check from your bank or credit union. We will try to provide you with the exact amount that you will need to bring to closing as soon as possible; however, in many instances, your lender may not deliver the loan package to us until the day the closing is scheduled; in some instances, it may BE ONE HOUR BEFORE THE CLOSING. If that is the case, we will not be able to give you the amount of the funds in advance and there will probably be a delay of the closing.
What happens at closing?
We will go over the closing documents with you. These may include the HUD Settlement Statement, Truth In Lending Disclosure, Promissory Note, Deed of Trust, Escrow Disclosure Statement, Termite Report, and Tax Information.
We will collect from you the money you were required to bring to closing. We will have made arrangements with your lender to obtain your loan proceeds. We will obtain the signatures of the sellers on your deed and other closing documents. We will be given a copy of your closing documents and the keys to your new house, BUT it isn’t your house yet.
After the closing, we still have more work to do. We may have to fax copies of the signed documents to your lender. We may still be waiting for your lender to send us your loan proceeds. We will update our title examination once more and record your deed and the deed of trust. FINALLY, THE HOUSE IS YOURS! All you have to do is pay for it. Several weeks after closing, we will mail your deed to you. About a week later, you will receive your title insurance policy directly from the title insurance company. Please put both documents in a safe place.
One final note about your property taxes:
if you purchase a home around the last six months of the year, we will collect and pay those taxes at closing. If you purchase a home around the first six months of the year, we will NOT collect and pay the taxes to the taxing authority because the tax rate for that year has not been set at that time. If your sales contract provides for the taxes to be prorated, we will reflect a credit on the settlement statement towards the purchase price for the seller’s share of the taxes. That credit will be estimated based upon the prior year’s taxes or tax rate since that will be the best information we will have at the time. If your sales contract provides that the seller shall fund your loan escrows without proration, we will again estimate the escrows based upon the prior year’s taxes or rates. If you should receive a tax bill later in the year from either the seller or our office, and you have a loan with escrows, send the tax bill to your lender. If your loan does not have a tax escrow, then you should pay the tax bill. Under either circumstance, IT IS YOUR RESPONSIBILITY to make sure that the taxes for the year of your home purchase are paid.
LEWIS, DEESE, NANCE, & BRIGGS LLP has been providing quality legal services in different areas of the law for many years. We are proud that our clients place their trust in us and respect all confidential information that is provided to us as a result of that attorney-client relationship.
Title V of the Gramm-Leach-Bliley Act generally prohibits any settlement agent from sharing nonpublic personal information about you with nonaffiliated third parties unless you receive a notice of its privacy policies and practices, such as the type of information that it collects about you and the categories of persons or entities to whom it may be disclosed. The Federal Trade Commission has issued an advisory opinion that closing attorneys who are significantly engaged in real estate settlement activities are covered by the Gramm-Leach Bliley act. In compliance with the Gramm-Leach Bliley Act, we are providing you with this statement which notifies you of the privacy policies and practices of LEWIS, DEESE, NANCE, & BRIGGS LLP, even though we believe that the Code of Professional Responsibility by which we are governed provides more stringent standards.
We may collect nonpublic personal information about you from the following sources:
- Information we received from you such as on loan applications or other forms.
- Information about your transactions we secure from our files.
- Information that we receive from other persons or companies involved in your transaction, such as the real estate agent or lender.
- Information we receive directly from you.
We may share information about you with nonaffiliated third parties only in order to provide you with legal services that you have requested; these parties might include title and hazard insurance companies, banks, and financial institutions. We do not disclose any nonpublic personal information about you except as is necessary in order to provide you with the legal services you have requested.
We restrict access to nonpublic personal information about you to those employees who need to know that information in order to provide our legal services to you. We maintain physical, electronic, and procedural safeguards that comply with the Code of Professional responsibility that governs our profession. Please call us with any questions you have about protecting your privacy.
LEWIS, DEESE, NANCE, & BRIGGS LLP is a full-service law firm providing legal services in a variety of areas including: Personal Injury and Wrongful Death, Residential and Commercial Real Estate, Domestic Relations, Worker’s Compensation, Estate Probate and Planning.