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Can our mortgage company change the loan terms after closing b/c they miscalculated the lender credits?

We recently refinanced our house. As part of the deal we were supposed to get some cash out as well as a lender credit to offset our closing costs in exchange for a higher interest rate. We had been working with two lenders throughout the process to compare. On the Loan Estimates "lender A" listed the lender credit clearly, however "lender B" said it wouldn't show up until the Closing Disclosure. The terms for each lender were roughly the same but we liked the personality of lender B more and we went chose them. When we received the Closing Disclosure from the lender the lender credit was listed on there as stated and so we signed off on it. Now on Friday we just signed all of our final paperwork (Closing Documents). Since it is a refinance we had 3 days to rescind the offer which was up at midnight last night. But we got a call last night from the lender saying he miscalculated the closing costs and that our lender credit exceeded the closing costs and now everything would have to be redone. I thought all that paperwork we signed was a final contract? Are they allowed to tell us we have to redo everything now because of an error on their part? We are in California and we are doing an FHA loan. My instinct is to contact my attorney but thought I would check here first. Thanks in advance for any insight. by caarktct66 from San Diego, California. Oct 26th 2016 Reply


Jesse Stroup (jessestroup)
#186 ranked lender in California - 588 contributions

They can not change the terms but they maybe able to fix the loan fee's.

Oct 26th 2016
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 7,681 contributions

OK.. so there are two things here that you need to understand.. first, there is a standard document included in all loan applications called the "Compliance Agreement" that you signed.. This Document is stating that you will help the lender after closing to correct errors in the documents at the lenders request. This is meant to only apply to clerical errors so that the loan will meet requirements from Fannie Mae or FHA, etc... miscalculating the closing costs would fall under this disclosure.. so, you are obligated to work with the lender to correct this problem.. 2nd, the lending rules are very clear,,, you are not allowed to receive a credit that exceeds the closing costs.. So, it's possible the lender will lower your rate, and then adjust the credits to meet guidelines.. At this point, there's no need to contact an attorney.. just listen to what your lender has to offer for the mishap.. if you are not satisfied, then maybe look at legal options... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Oct 26th 2016
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