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Lender asking for additional funds after closing

We closed on our refinance 3 days ago. Lender contacted us today and stated that we need to pay 1 years worth of homeowners insurance in advance. Our current insurance payments are in escrow from our old lender. Our closing documents state that amount due at closing is $136, which we paid at closing. We were aware that the lender was asking us for a specific level of coverage and we met those terms. We were not informed in writing that we had to pay it in advance. Actually, we didnt even receive any payment information from the new insurance company as they sent it directly to the new lender. What should we do? Can the new lender do this and not fund if we do not meet these after the fact conditions? by lois713 from , California. May 6th 2016 Reply

Grace Lee (GraceLee)
#185 ranked lender in California - 1 contribution

Ask your lender the details and help them make the corrections in legal terms, whatever overage cost or fees should be refund back to you.With any lender they will ask you to compliance with their requirements. During your signing of the loan closing package, there is a document calls "ERROR AND OMISSIONS/COMPLAIN AGREEMENT". You had signed this document; it means that if there are mistakes or clerical errors, in any loan closing documentation if deemed necessary or desirable in the reasonable discretion of your new lender to enable to sell, convey, seek guaranty or market the loan to any future entity, like Federal Housing Authority, the Department of Veteran Affairs, Federal National Mortgage Association, Federal Home Loan Mortgage Corporation, and or Municipal Bonding Authority and private investor.You the borrower (s) agrees to comply with all above noted requested by your lender. All borrowers agree to assume all costs including, by illustration and not limitation, actual expenses, legal fees and marketing losses for failing to comply with correction requests.

May 6th 2016
Lorne Harvey (lorneharvey)
#80 ranked lender in Washington - 431 contributions

The new lender needs to be sure you have enough in your impound account to cover the annual billing on your Home Owners Insurance when it comes due. They may not have collected enough, and you will need to assist them with what they need. Keep in mind as Grace says, you will get refunded the current balance in your existing escrow account when your existing lender reconciles that account.

May 9th 2016
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