April 2007

Monthly Archive

How to Deal with Problems when Refinancing a Loan

Summary

I recently refinanced my home in Ohio. I worked with a mortgage broker and refinanced with the same mortgage company that my existing loan was with. About 3 weeks after closing I viewed my account on line and realized that both my existing loan and my new loan were active. I called to verify that they were both open and was told that they had no knowledge of my refinancing, even though both loans were in my name. My existing loan had not been paid off and the mortgage company was looking for pay ment on that loan. the same mortgage company that my existing loan was with. I recieved $15,000 in cash at closing, $10,000 as a result of a prepayment penalty being paid to me and $5000.00 added on to my principle. I was going to apply the $10,000. to my principle on my first payment. About 3 weeks after closing I viewed my account on line and realized that both my existing loan and my new loan were active. I called to verify that they were both open and was told that they had no knowledge of my refinancing, even though both loans were in my name. My existing loan had not been paid off and the mortgage company was looking for pay ment on that loan.

I called my mortgage broker and he worked with a representative from OptionOne (the mortgage co.) and they let me know 5 days later that another person’s loan with the same last name as mine had been paid off instead of mine.

Dear Esq. is not intended as direct personal legal advice. For direct personal legal advice regarding your own state and situation you should consult a local attorney. → You should not and may not rely on anything on this website as legal advice.

“I recently refinanced my home in Ohio. I worked with a mortgage broker and refinanced with the same mortgage company that my existing loan was with. I recieved $15,000 in cash at closing, $10,000 as a result of a prepayment penalty being paid to me and $5000.00 added on to my principle. I was going to apply the $10,000. to my principle on my first payment. About 3 weeks after closing I viewed my account on line and realized that both my existing loan and my new loan were active. I called to verify that they were both open and was told that they had no knowledge of my refinancing, even though both loans were in my name. My existing loan had not been paid off and the mortgage company was looking for pay ment on that loan.

I called my mortgage broker and he worked with a representative from OptionOne (the mortgage co.) and they let me know 5 days later that another person’s loan with the same last name as mine had been paid off instead of mine. I was led to believe that the change over would be simple and the payment on my existing loan would be backdated to the date it was to have been paid off with no negative impact on me. I was told to wait from a call from OptionOne to make sure things had been resolved to my satisfaction.

When OptionOne called they immediately told me that all calculations for paying off my existing loan were based on the other Buzzelli’s mortgage payoff and that I needed to send them a check for $15,000. in order to pay off my existing loan in full. I let them know that I still had the money but I didn’t have my paperwork in front of me and I wanted to talk to my mortgage broker and lawyer before making any such move.

I am certain that the good faith papers that I signed and initialed (when I met with my mortgage broker) contained the correct information. The papers that I signed at closing were incorrect. I did not know they were incorrect. I assumed that all calculations were based on my property and my payoff and everything was up to snuff.

My questions are as follows:

1. If I wanted to completely back out of the agreement at this point would I be able to?

2. Do I have any case for keeping the agreement as is..meaning they pay off my old mortgage anyway, I keep the $15,000 and the same payments and move forward with the new loan?

3. Does title insurance have any impact in this situation ? I paid for it…

Any assistance would be greatly appreciated! Thanks so much!”

I got confused at the $10,000 prepayment penalty. Prepayment penalties are paid to the lender when a loan is paid off before it has been in existence a certain time. I don’t understand why you would be getting cash back due to a prepayment penalty; typically, that would be added to the new loan in order to pay the penalty on the old one. But to try to answer your questions:

1. It’s possible, but not likely. Mortgage lenders don’t generally like to pay out money at non-current rates. If your old loan had a higher interest rate than what is currently available, they might be more inclined to do that, of course, but in that case you’d probably be better off just getting a new loan.

You might be able to convince them to do it anyway if it looks like the mortgage company somehow defrauded you, but that’s the sort of thing that’s often difficult to prove.

2. Sorry, no. There ain’t no such thing as a free lunch, or in this case a free $15,000.

3. Probably not. Title insurance generally insures against defects in the title (i.e., proper ownership). The loan paperwork is the problem of whoever drafted it up.

Those answers are very general, and your situation is fairly complex, so I would strongly urge you to have an attorney review all the paperwork before you make a final decision on how to proceed.

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State laws vary, and the above is intended as general advice, and not direct legal advice regarding any one particular situation in any one state. For direct personal legal advice related to your own situation you should consult an attorney familiar with the laws of your state and with your situation.

 

My Ex Boyfriend helped Pay for the Mortgage, Car Payment and Insurance, Does he Still have an Obligation to still Pay these Items?

Summary

15 months ago I sold my Illinois home and moved here to Whitney Point, NY with my 80 yr old male friend. He didn’t put a penny towards this house before, during or after the sale yet I loved him and thought we’d always be together. Now he’s in Missouri with a married daughter. He left here 3 weeks ago. I Also have durable Power of Attorney and regular POA over him. All he has contributed these past 15 months is paying half a mortgage the total mortgage is 455. it includes taxes and insurance If I continue to pay on my own there is very little or no money left for me to buy gasoline, pay my utilities, buy food, pay for care of out 8 pets, make the car payments which is in both our names it is 187.00 a month.

Dear Esq. is not intended as direct personal legal advice. For direct personal legal advice regarding your own state and situation you should consult a local attorney. → You should not and may not rely on anything on this website as legal advice.

“15 months ago i sold my Illinois home and moved here to Whitney Point, NY with my 80 yr old male friend. He didn’t put a penny towards this house before, during or after the sale yet I loved him and thought we’d always be together. now he is gone and asked to go by the County Sheriffs office for sexually harassing a female librarian in town here. That’s a different matter. Now he’s in Missouri with a married daughter. He left here 3 weeks ago. The first of the month came by and he emailed me to say he would be willing to leave his pension ($625.00) in the bank here so i can add my half of the mortgage to it for when the bank automatically withdraws the $455.00 every month.) I Also have durable Power of Attorney and regular POA over him. I am not about to take this man’s money on a monthly basis but when we lived here together we always shared the money since i get $960) a month social sec. I want him to continue to pay his half as long as i live or he lives I am 64 he is now 80 his health is extremely poor my health is very good. I did everything for him dressed him daily helped him shower, fed him when his right arm stopped to move, i curled his moustache . I shaved him , cleaned his clothes and he wore a clean outfit each day, i wiped his butt every day 2-3 times, i helped him get in and out of chairs even in public places, i put his jacket on and off. All he has contributed these past 15 months is paying half a mortgage the total mortgage is 455. it includes taxes and insurance If I continue to pay on my own there is very little or no money left for me to buy gasoline, pay my utilities, buy food, pay for care of out 8 pets, make the car payments which is in both our names it is 187.00 a month. I need some advice and a attorney wants an up front amount of money to answer my questions i don’t even have 25.00 in the bank I do not drink do not smoke do not gamble do not even go out of the house much due to no money i never had kids. i have no sisters or brothers i am really all alone in this world he has 6 kids from 3 different marriages.. Right now they are all calling me the bad one who threw him out (Really the police did) and no one talks to me What do i want? i want him to pay for half the car half the house half the car insurance and i’ll be happy.”

If he’s not on title to the house there is nothing you can do to make him pay half the mortgage. If he is, then you could do a partition action, which will end up getting the house sold out from underneath you. With respect to the car, if you are both on the loan, then the loan company will look to either of you to pay the obligation. It sounds like you are getting all the use out of the vehicle.

Be honest, you do want him to pay money. But it’s difficult to create an obligation to pay out of nothing. Did you have a contract to wipe his butt and clean his clothes that he did not pay on? If so, you could sue to enforce that obligation. But if there was no breach of a service contract and he’s not getting any benefit of the items you are paying on, I am having a tough time figuring out what kind of action you would file to create an obligation for him to pay.

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Michael Durgavich is an accomplished attorney and mediator. Maintaining a general practice in the San Jose, California area, Mr. Durgavich specializes in family law, bankruptcy, and alternative dispute resolution. Mr. Durgavich can be reached through his website at http://www.MichaelDurgavich.com. Contact This Author

State laws vary, and the above is intended as general advice, and not direct legal advice regarding any one particular situation in any one state. For direct personal legal advice related to your own situation you should consult an attorney familiar with the laws of your state and with your situation.