Can you cancel a mortgage refiancing before you close?

[vi edit]

Just curious. I'm pretty much beyond pissed with the way my refiancing is going, and I finally got my settlement costs in the mail today....$1000 more than what I told I would need to bring to the table.

I pretty much want to tell these guys where they can stick it. I was looking through the closing paperwork and there is some federal law in there that says I can cancel the process within three days of closing. Wasn't sure how that worked out.

Vic, you out there? I'd assume there were some fees I would still be liable for if I could even do this, correct?

 

[Queasy]

If you want to cancel you can. They can't stop you (fees I'm not sure about). This is a typical practice of mortgage lenders where they tell you a fee amount then bump it up right before closing. My wife had a client who walked into closing and was told by the lender she was going to have pay an extra $1500 towards closing. The client ranted and raved and told the lender that she was going to back out if they didn't go back down to the original agreed upon amount.

Stick to your guns and don't let them stick it to you.

 

[ATLien247]

I have before...

It wasn't because I was getting screwed, but because I discovered that a friend now worked for a competitor and could hook me up.

They were suprised that I backed out, but they never asked for compensation.

 

[Sketcher]

You can cancel before close. Regarding fees or fines, depends on the preliminary contract you've signed - typically, there's no charge for fee's other than paperwork costs.

 

[NogginBoink]

Originally posted by: vi_edit
Just curious. I'm pretty much beyond pissed with the way my refiancing is going, and I finally got my settlement costs in the mail today....$1000 more than what I told I would need to bring to the table.

I pretty much want to tell these guys where they can stick it. I was looking through the closing paperwork and there is some federal law in there that says I can cancel the process within three days of closing. Wasn't sure how that worked out.

Vic, you out there? I'd assume there were some fees I would still be liable for if I could even do this, correct?

I did just that with WaMu. Four months after applying for a refi, I told 'em to forget it.

They can probably charge for appraisal and survey if they've already been done.

 

[RossMAN]

Paging Vic, where are you?

 

[KK]

I believe you can even cancel after you close. There is like a grace period before your original loan gets funded where you can back out.

KK

 

[vi edit]

Here's the actual paperwork on canceling

Not sure what I'm obligated to pay for though. Origination fees? I have no problem paying for the appraisor. I can maybe use his info for the next refinancing and recoup that cost there.

 

[EagleKeeper]

If the closing costs do not come near the good faith estimate, you have the right to complain about it and may be able to get the situation corrected.

Talk to some other finanace experts in your area (local bank, mortgage broker, etc)

 

[Corn]

You actually have up to three days after closing to cancel.

You will, however, owe any hard fees (mainly appraisal and credit report) the lender has already paid on your behalf.


If you don't mind me asking, what were the fees that increased between what was originally quoted and now?

 

[vi edit]

What really pissed me off is that I didn't get my TRUE settlement costs until about 12:30 today, and that's only because I called up and demanded that they email it to me. They overnighted the hardcopy paperwork to my home today and that arrived at 1:30. I'm *supposed* to close tonight at 7:00. In looking over the paperwork that was fedexed to me, it says that I need to have a certified check for any amount over $1500. Well, it's kind of hard to get a certified check written out if I don't know until a couple hours before closing what I'm supposed to make it out for. And then, to top things off the settlement amount was considerably higher than what the good faith estimate was.

And the stuff today is just added to two months of uncertainty and frustration that I had with the rest of the process.

uhg.

 

[vi edit]

If you don't mind me asking, what were the fees that increased between what was originally quoted and now?

From what I can tell, there was some issue with the escrow amount from the previous lender. There was a charge on the settlement for about $450 labled as "escrow overdraft", and then they dinged me for interest payments from January 1st to February 14th accounting for another $1000. Those two together added up to over $800 over the Good faith estimate amount.

 

[Maetryx]

That extra money is most likely the prepays for your escrow account. My *%$#ing real estate agent forgot to mention those until the morning of my closing, after telling me a much lower figure the night before. Anyway, I'd bet $1500 you're simply funding the escrow account.

 

[kranky]

Don't count on the appraisal being accepted by the next guy. It seems to be a little racket where certain lenders only work with certain appraisers. Supposedly that "protects" the lenders from getting artifically-inflated appraisals which could be used to defraud them.

 

[Corn]

From what I can tell, there was some issue with the escrow amount from the previous lender. There was a charge on the settlement for about $450 labled as "escrow overdraft", and then they dinged me for interest payments from January 1st to February 14th accounting for another $1000. Those two together added up to over $800 over the Good faith estimate amount.

Well, in all fairness this is not the fault of the lender you are now trying to refinance through. Until they receive the payoff statement from your current lender, they can only use the balance thats listed on your credit report. The company thats lending you the money now has no idea you've had an escrow shortage by your current lender. [edit] The escrow overdraft is simply a shortage in your current escrow account with your current lender--most likely the result of the fact that they just paid out taxes or insurance recently and haven't yet recouped the shortage from your payments. This is fairly common for many reasons, the main being new construction where the lender doesn't have access to the final property taxes you will be charged, or, because like most people endured this year, a substantial increase in the cost of your homeowners insurance.

The additional interest charges from the 1st to the 14th are the result of you not making a payment to your current lender for this month (or haven't been posted, you would get a refund if you did already make that payment). This sitation is very common when loan disbursement doesn't happen before the end of the month and carries over into the next month. In any event this interest "fee" is being charged by your current lender and not who you are closing with.

 

[vi edit]

I've already put down a $250 non refundable deposit that would cover a good chunk of the appraisal fee. And to be honest, I'm not too worried about loosing that amount.

The rates are actually about 1/2 a point lower now than when I locked in so I'd easily make that back in short time. My stomach is doing hula hoops right now trying to figure out what to do. Visgf doesn't get home for another hour or two and she's going to blow a gasket when she see's that final amount due. She's already more frustrated with the lender than I am.

 

[vi edit]

The additional interest charges from the 1st to the 14th are the result of you not making a payment to your current lender for this month (or haven't been posted, you would get a refund if you did already make that payment). This sitation is very common when loan disbursement doesn't happen before the end of the month and carries over into the next month. In any event this interest "fee" is being charged by your current lender and not who you are closing with.

Don't get me started there. I wanted to close before January 1st. The paperwork was done and ready to go in December, it just got "misplaced" and took me calling them every day for a week leaving voicemails to get it "found".

 

[Corn]

Don't get me started there. I wanted to close before January 1st. The paperwork was done and ready to go in December, it just got "misplaced" and took me calling them every day for a week leaving voicemails to get it "found".

You and the rest of the world.

Unfortunately because of the ridiculously low interest rates, mortgage companies are being hammered, in some cases loans can't get underwritten and appraisals can't get done within a reasonable period of time. I doubt your paperwork was "lost" (there's big commissions riding on these deals, you think someone is really gonna lose it?), most likely your loan officer just didn't have the guts to tell you how it is upfront. Typical.