If the loan office made a mistake regarding a house that I purchased, do I have to pay for it?
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If the loan office made a mistake regarding a house that I purchased, do I have to pay for it?
I bought a house a year ago. Then 2 mo nths agoI got a letter from my loan company saying I was over $1,800 short. I called to find out why and they said my loan officer did not have us pay for the first 6 months of taxes along with some other thing that I was to pay at closing, so the bank had to pay it out. At the time we had the money but now I don’t know if I can make my house payment; it went up $170 a month. Can I go back on the loan officer for her mistake or am I just stuck paying for it myself?
Asked on March 29, 2012 under Real Estate Law, Kansas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you truly do owe the money--it is an amount that you are legally and properly obligated to pay AND the fact that you would be responsible for it was disclosed in advance (even if there was some error in how/when you would pay it)--then you are liable for it and do not have recourse against loan officer or lender. Even if the loan officer was negligent (or unreasonably careless), you have not suffered a compensible form of injury, since you are only being asked to pay amounts which you were aware you'd have to pay.
However, if the amounts are a "surprise" in that it was never disclosed to you that you would have to pay them (so it was not merely the timing of when they'd be paid, but the fact of paying them, that was not disclosed), you would have a good case for not paying them--you can only be held liable to costs or amounts disclosed to you prior to agreeing to the transaction. In that case, you could likely have the bank absorb the cost.
The above is under general legal principals. In addition, there is a statute, TILA (Truth in Lending Act) which allows a homeowner to rescind a mortgage for certain innacurate disclosures. Of course, rescinding a mortgage is a drastic step--the general rule is that you'd have to give the mortgage principal back, which you may not be in a position to do; and clearly homeownership can be implicated), so this is not a step done lightly.
Overall, if the impact of the extra money could mean you can't afford your home, you should discuss the matter in detail with a real estate attorney to evaluate your options.
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