Consumer Law, Warranties Mortgage loan fee's incorrectly charged by bank

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Mcupp

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I also posted this in the Real Estate section.

We recently purchased a home using a USDA loan and today we receive a letter stating the following:
"Our investor has contacted us regarding an error on your loan that closed on XX day. Due to an error the amount of the loan guarantee to USDA was incorrect in our system and on your settlement statement; we sincerely apologize for this error. The amount due to usda is $3366.32 and the amount collected was $2366.32, a difference of $1,000.00. We will need you to return a check to us makde payable in this amount as soon as possible so we can return these funds to USDA. and so on.

They also sent us "new" Truth-in-lending" forms with the date marked as the day we closed and asked us to sign these new forms.

Are we liable for these fee's since it was their mistake? Any advice would be appreciated.
 
I suspect you will wind up being liable, but I would like to know what the mistake was. This sounds like a simple clerical error in the original statement that they are now correcting. It's not like that would have damaged you, other than leading you to believe the purchase would be cheaper than it really was. This is money that you would have been liable for anyways if the error had not been made.

I'm not sure what to advise you about the truth-in-lending forms. What does the date purport to represent - the date of closing, the date the document was prepared, the date you signed...?
 
I used to work in finance and if we ever made a mistake that resulted in the customer paying less than they were supposed to we would always "eat" that money. I just don't know if we are legally bound to pay these fee's since we have already signed the documents with their mistake.

Yes, the forms were reprinted with the date we actually closed on the loan. So, they obviously printed the forms when they found the error and printed the date as our close date.
 
I don't know where you worked or where the terms were or what the mistake was. If the terms were clear then you have an obligation to pay the full amount. It seems as though you agreed to 3366 but their system sent out an invoice of 2366. It's a processing error not a mistake on the agreement. You both agreed you'd pay 3366. IMHO, from what I know, I'd say that you owe the extra $1,000. If you see something wrong with my logic, I'm all ears.
 
I think you misunderstood my question. The settlement statement at closing and all previous settlement statements showed the $2366.00. We were never aware that the correct amount should have been $3366.00 until we received the letter from the bank over a month after our closing. This is why I'm wondering if we are liable for these charges. It just seems to me that it was their mistake and they should be responsible for it.
 
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Given that the amount is 33% different, I'd say that this isn't a small mistake but an obvious one. Was this a surprise? Did you really think that the payments were only $2,366 and then somehow it was $3,366? I don't know. With regard to the law, a unilateral mistake by one party does not make a deal "void." Is there a formula that is used to calculate the amount due? Who made the mistake? Who would be responsible for the mistake? What number was presented to and/or calculations? There are a number of factors here that would determine the outcome of who bears the loss of the mistake. The bottom line - if you knew or should have known a mistake was made, chances are better that you'll be responsible for the amount of money you knew or should have known you owed.
 
Yeah, it was a big difference. This was not a mistake in our monthly payment amount or any other on going debt. It was a one time fee required at the time of closing. We were in no way aware of this discrepancy until we received the letter. Can I assume that we are not liable? I just want to make sure before I call them tomorrow to fight the fee. I'm assuming since they are a bank they aren't so much concerned with the money as they are with the incorrect paperwork that could cause them issues with audits.
 
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You can say whatever you want - it's just a negotiation. They will tell you why you should have known and you can choose to disagree. I'd say less rather than more and just assert your position. Good luck and let us know how it turns out.
 
I don't think you can assume you are not liable.

What is the $1000 one-time fee for? When did you know (or when ought you to have known) that it was to be part of your closing costs?

Look at it from the bank's point of view - why should they NOT be allowed to correct the error? Was it a simple omission, so that the original loan documents did not reflect the agreement you had reached? Did they fail to disclose this charge in the first place?
 
They disclosed the correct Fee in their letter to us. We didn't receive this letter until this week. We were never aware of the correct amount until then. It has been over a month since we closed on our house. To them this may be a simple clerical error but to us it is $1000.00 that we were never aware of and a week before our mortgage payment is due on top of that. They didn't disclose the amount to us and then accidentally take the incorrect amount. The letter stated that the error was their fault but still requested that we send them the money. This is why I feel we should not be liable. If we had known about the correct fee at some point before our closing and then they just made a typo I could see why we should have to pay it but this was not the case. Not one time did they ever disclose the correct fee to us before our closing.

The Fee was for the "loan guarantee to USDA". I assume this is just a charge that USDA requires for the processing.
 
The point is whether you should have known the right price for the fee, e.g. "the fee shall be the 1% of the amount of the sale" which had an incorrect number entered, despite the clear explanation of how much the fee was. If the fee was determined by the company and provided to you without any explanation so that the agreement reads "fee shall be $2000" and then later, internally, realized their own mistake, then you would be correct. The unilateral mistake is only theirs, you would have no way of knowing about an error prior and they should bear the loss due to their own clerical error. We simply don't know all the facts yet.
 
Thanks for that post. It cleared up what you all have been saying. At no point during the loan process do I remember them stating it would be a percentage of the home's price. From the start they only disclosed it as a dollar amount. Now that you posted that, it only makes sense that it would be a percentage. Even though they never expressed it as a percentage it can only be our word against theirs I would assume. None of the paperwork we have from the bank states the fee is a percentage though.
 
Good. My recollection of common law is that a unilateral mistake by one party that might not have been discovered by the other party might only be voidable by the party who did not make the mistake. If the mistake should have been discovered then there is no agreement at all because there was no "meeting of the minds" - you both agreed to a different deal than the one that took place. In this instance, the bank would need to prove that you knew or should have known what the correct amount was. Let us know how it turns out and good luck.
 
Called the bank on Monday with no response. I finally emailed them Monday night and got a reply today. They stated that it was their mistake and that the bank would "absorb" the remaining fee. I really appreciate the assistance/advice from you guys!!
 
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