HUD mistake.
October 19, 2010 5:24 AM Subscribe
Just bought a house a couple weeks ago. Evidently, there was an error on the settlement statement (HUD-1) that we all signed and got copies of. Is it a done deal or can the attorney claim we need to come back in and pay more?
The lender fees were calculated wrong and we ended up bringing too much money to the closing, so we were issued a small refund check. Now, the lender figured it out and wants the rest of their money back. Of course they do. But, the lender approved the HUD that all parties signed at the closing. We got the keys and deed. Isn't the deal done? They screwed up. Why should we have to pay to fix their mistake?
The lender fees were calculated wrong and we ended up bringing too much money to the closing, so we were issued a small refund check. Now, the lender figured it out and wants the rest of their money back. Of course they do. But, the lender approved the HUD that all parties signed at the closing. We got the keys and deed. Isn't the deal done? They screwed up. Why should we have to pay to fix their mistake?
Legally speaking you need to ask an attorney, nobody here is going to give you specific legal advice. Ethically speaking, come on dude.
This. You need a lawyer for the real answer, and I don't think the ethics are all that complicated.
posted by Forktine at 5:56 AM on October 19, 2010
Someone has to pay, but it might not be you.
"Closing" means closed. Done.
Who calculated the number wrong? Find that person, and you'll find who's liable for the shortfall.
I don't think you have any more legal obligation to pay for a mistake someone else made that you would if the realtor screwed up and forgot that the price for the house was 100k more than you agreed to. Should you then just write out the seller a check for 100k? Obviously not.
Unless there are provisions in your contractual arrangements with the various parties, or you committed some fraud, a mistake on someone else's part is not your mistake. Lender may not like it, and the lawyer or clerk who made the mistake may not like it, and it may be somewhat shady morally, how would they possibly justify coming to you to resolve their mistake? Someone has errors and omissions coverage.
I am not a lawyer... just a guy who has owned 14 houses. You did your part. Zone out.
Let the screwups solve their own screwups. I suspect they'll quit asking if you say no.
posted by FauxScot at 6:12 AM on October 19, 2010 [2 favorites]
"Closing" means closed. Done.
Who calculated the number wrong? Find that person, and you'll find who's liable for the shortfall.
I don't think you have any more legal obligation to pay for a mistake someone else made that you would if the realtor screwed up and forgot that the price for the house was 100k more than you agreed to. Should you then just write out the seller a check for 100k? Obviously not.
Unless there are provisions in your contractual arrangements with the various parties, or you committed some fraud, a mistake on someone else's part is not your mistake. Lender may not like it, and the lawyer or clerk who made the mistake may not like it, and it may be somewhat shady morally, how would they possibly justify coming to you to resolve their mistake? Someone has errors and omissions coverage.
I am not a lawyer... just a guy who has owned 14 houses. You did your part. Zone out.
Let the screwups solve their own screwups. I suspect they'll quit asking if you say no.
posted by FauxScot at 6:12 AM on October 19, 2010 [2 favorites]
IANAL, but this isn't a case of you paying for their mistake. You would be paying exactly what you expected to pay originally, no more.
posted by monkeymadness at 6:22 AM on October 19, 2010
posted by monkeymadness at 6:22 AM on October 19, 2010
I'm confused. So the bank that's lending you money to buy the house, and with which you presumably intend to have a continuing financial relationship, miscalculated the fees you were supposed to pay them and paid you some money back by mistake? Do I have that right? If so I doubt they'll give up very easily.
Anyway, nobody (including a lawyer) is going to be able to resolve your legal question without a working knowledge of the relevant law in your jurisdiction and access to all relevant documents. And nobody is going to be able to resolve your moral question without the ability to see deep into your soul. Sorry.
posted by A Thousand Baited Hooks at 6:44 AM on October 19, 2010 [1 favorite]
Anyway, nobody (including a lawyer) is going to be able to resolve your legal question without a working knowledge of the relevant law in your jurisdiction and access to all relevant documents. And nobody is going to be able to resolve your moral question without the ability to see deep into your soul. Sorry.
posted by A Thousand Baited Hooks at 6:44 AM on October 19, 2010 [1 favorite]
Now, the lender figured it out and wants the rest of their money back.
They screwed up. Why should we have to pay to fix their mistake?
These statements are not compatible. If it is their money that you would be returning, why would you be paying to fix their mistake? Giving back money that you ended up with in error is not paying - there is no cost to you. Ethically, the situation is pretty clear.
posted by ssg at 7:40 AM on October 19, 2010
They screwed up. Why should we have to pay to fix their mistake?
These statements are not compatible. If it is their money that you would be returning, why would you be paying to fix their mistake? Giving back money that you ended up with in error is not paying - there is no cost to you. Ethically, the situation is pretty clear.
posted by ssg at 7:40 AM on October 19, 2010
I'm not sure what "lender fees were calculated wrong" means exactly. Generally, they make up their "lender fees" -- you know, "origination fee" and "document fee" and who knows what. They can charge or not charge you these fees -- unlike, say, government recording fees and title insurance and other things that are set by third parties. Lender fees can even be negative amounts (they can pay you to accept the terms of the loan, which they then generally turn around and sell to make their profit), depending on the interest rate you take.
If this is just something they usually charge, and now say they wish they had put on your HUD, too, I wouldn't hand it over out of moral obligation. Seems to me that's more like they charged you some amount for their services and now want to come back and get more out of you.
posted by palliser at 7:41 AM on October 19, 2010
If this is just something they usually charge, and now say they wish they had put on your HUD, too, I wouldn't hand it over out of moral obligation. Seems to me that's more like they charged you some amount for their services and now want to come back and get more out of you.
posted by palliser at 7:41 AM on October 19, 2010
monkeymadness....
Not quite true.... closing often involve last minute adjustments and tweaks. Cosing is not set up to negotiate terms, nor are pre-closing estimates binding, but closing does terminate the transaction. I've gone into them expecting cash back, and expecting to pay more, and been wrong both ways. Once it's done, however, it's done.
Coming to a party for money after the deal is consummated IS paying for their mistake(s), in a very real and tangible form. The injury was done by the party making the mistake, not the party benefiting from it. Everyone had a chance to correct the calculations BEFORE they all agreed that they were correct. Under your scheme, they could come back in 20 years and make claims. Or go back two or three owners.
The moral question is separate, and depends on the parties' willingness to work outside the strict terms of the agreement, which provides for a closing. Closing happened. The transaction is complete. If someone wants to sue, of course, they can, but they are unlikely to prevail in punishing party A to recover damages from a mistake committed by party B. If one is chickenshit enough to be scared off by the mere threat of a lawsuit, this extortion sometimes works. Personally, if you want to sue me, have at it. That's what judges are for.
Perhaps you think it would be proper for you to be paddled for the bad behavior of your unrelated classmate?
posted by FauxScot at 7:43 AM on October 19, 2010 [5 favorites]
Not quite true.... closing often involve last minute adjustments and tweaks. Cosing is not set up to negotiate terms, nor are pre-closing estimates binding, but closing does terminate the transaction. I've gone into them expecting cash back, and expecting to pay more, and been wrong both ways. Once it's done, however, it's done.
Coming to a party for money after the deal is consummated IS paying for their mistake(s), in a very real and tangible form. The injury was done by the party making the mistake, not the party benefiting from it. Everyone had a chance to correct the calculations BEFORE they all agreed that they were correct. Under your scheme, they could come back in 20 years and make claims. Or go back two or three owners.
The moral question is separate, and depends on the parties' willingness to work outside the strict terms of the agreement, which provides for a closing. Closing happened. The transaction is complete. If someone wants to sue, of course, they can, but they are unlikely to prevail in punishing party A to recover damages from a mistake committed by party B. If one is chickenshit enough to be scared off by the mere threat of a lawsuit, this extortion sometimes works. Personally, if you want to sue me, have at it. That's what judges are for.
Perhaps you think it would be proper for you to be paddled for the bad behavior of your unrelated classmate?
posted by FauxScot at 7:43 AM on October 19, 2010 [5 favorites]
Isn't the deal done? They screwed up.
If it's a simple typographical or arithmetic error, I believe you will have to pay up. The transaction only happened a few days ago. The rules governing contracts and transactions generally have provisions for correcting obvious mistakes, especially when they are found quickly. Over the long haul, it is to everyone's benefit that errors like this be corrected.
IANAL. If you really want to try to hang on to the money you should talk to a lawyer.
posted by alms at 7:49 AM on October 19, 2010
If it's a simple typographical or arithmetic error, I believe you will have to pay up. The transaction only happened a few days ago. The rules governing contracts and transactions generally have provisions for correcting obvious mistakes, especially when they are found quickly. Over the long haul, it is to everyone's benefit that errors like this be corrected.
IANAL. If you really want to try to hang on to the money you should talk to a lawyer.
posted by alms at 7:49 AM on October 19, 2010
See here for more. I know nothing about the legal question, though.
posted by palliser at 7:51 AM on October 19, 2010
posted by palliser at 7:51 AM on October 19, 2010
(I've done HUD-1s. I've also screwed up HUD-1s. I've also had to collect additional money from borrowers because of my screwup.)
"The lender fees were calculated wrong and we ended up bringing too much money to the closing, so we were issued a small refund check. Now, the lender figured it out and wants the rest of their money back."
I'm confused. What is the "it" that the lender figured out? Whose money is it? Was it a fee you were supposed to pay, or one that the lender was supposed to pay?
posted by Lucinda at 1:09 PM on October 19, 2010
"The lender fees were calculated wrong and we ended up bringing too much money to the closing, so we were issued a small refund check. Now, the lender figured it out and wants the rest of their money back."
I'm confused. What is the "it" that the lender figured out? Whose money is it? Was it a fee you were supposed to pay, or one that the lender was supposed to pay?
posted by Lucinda at 1:09 PM on October 19, 2010
Fauxscott: Completely unrelated example. It wouldn't be a paddling for something my classmate did. It would be closer to say my classmate gave me his lunch money by mistake and wants it back. The worst potential outcome here is a loss of free money. It's very different from a paddling, and I'm really surprised that so many people here think of it in any way as the OP paying for someone else's mistake. Either way, I'm not a lawyer so can't make a legal call, but I threw in my 2 cents on the ethics. There seems to be some disagreement here on that question, which as I said surprises me, but I guess people are just coming from different places on this.
posted by monkeymadness at 4:01 PM on October 19, 2010
posted by monkeymadness at 4:01 PM on October 19, 2010
I did say the ethical issues were separate. OP asked for nuts and bolts advice on the legal issues. I think my response was on target.
I have often paid for other peoples' mistakes, and have never been that hung up on money.
The salient point is that there is a REASON they call it a CLOSING. It's closed. OP is technically off the hook, regardless of what fairness you think is relevant. If the situation were reversed, he'd be singing the blues, of that you can be most certain.
In my own world, I count the generation of ill will as a cost, and would take that into consideration. I make it a habit never to piss off the cook.
posted by FauxScot at 5:27 AM on October 22, 2010
I have often paid for other peoples' mistakes, and have never been that hung up on money.
The salient point is that there is a REASON they call it a CLOSING. It's closed. OP is technically off the hook, regardless of what fairness you think is relevant. If the situation were reversed, he'd be singing the blues, of that you can be most certain.
In my own world, I count the generation of ill will as a cost, and would take that into consideration. I make it a habit never to piss off the cook.
posted by FauxScot at 5:27 AM on October 22, 2010
I see. I was making an ethics call and not a legal one.
posted by monkeymadness at 8:36 AM on October 23, 2010 [1 favorite]
posted by monkeymadness at 8:36 AM on October 23, 2010 [1 favorite]
This thread is closed to new comments.
Legally speaking you need to ask an attorney, nobody here is going to give you specific legal advice. Ethically speaking, come on dude.
posted by Justinian at 5:35 AM on October 19, 2010 [4 favorites]