Posted by KimWmsVA on 7/22/09 6:33am
Msg #296808

This is a new one for me...

I did a closing on 6/2 for Closing Masters (they paid on time - no issues with them at all); however, I get a call yesterday evening (7/21) from the borrower. Apparently, the lender (Lend America) failed to pay off her first mortgage and since she had auto debit set up, her old mortgage payment and the new mortgage payment (which was supposed to be on 8/1) both hit her account on 7/1. She has been calling Lend America and the loan officer and he has been avoiding her. So she called me, really upset, but I listened - I would have been pissed off too. I could not "advise" her for any legal action; however, I did mention that if it had happened to me, I would take the payoff schedule from the package and contact each one and make sure whether they did or did not receive payment and when. THEN I would go back to Lend America.

I just thought I would share. I felt really bad for her, as a single mom and to have this happen. Just doesn't seem like something is right in the mix.

Reply by Ilene C. Seidel on 7/22/09 6:52am
Msg #296810

Kim I ask Borrowers if the current loan is auto debited if it is I tell them to call the mortgage company to cancel the debit. One hand doesn't know what the other is doing and most likely the old mtg was paid off but the auto debit not cancelled. It takes a few days for the old mtg to be recorded and paid off. She needs to cancel the auto debit and call the old mtg co to verify it hasn't been paid off. If there is a problem she needs to call the licensing bureau for her state to file a complaint. In Maryland its the Maryland Insurance Commissioner. Maybe you should call her to give her this info.

Reply by PAW on 7/22/09 7:24am
Msg #296812

Another possibility is that the borrower had sent up automatic payments from her account to the mortgage company. If that was the case (rather than the mortgage company debiting her account, withdrawing funds), the auto-debit will continue until the borrower terminates the action. As was previously mentioned, even if the mortgage company was debiting the account, the borrower should always terminate the action with the bank.

Reply by sue_pa on 7/22/09 7:32am
Msg #296814

I certainly don't know the answer but I'd tend to agree with the other responses although her loan should have been paid off the beginning of June and the old lender should by the end of the month had sufficient time on their own to cancel the automatic withdrawal. If I were her (and I would NOT as the other suggested even call her back for any reason) I would find out if my old mortgage was paid off on July 8 and if not, why not. I'd also be certain I didn't pay any extra interest beyond that date.

Not knowing your borrower, but if funds are so tight, she should have never taken this loan. I have NEVER seen padded fees like the ones I saw so who knows what could actually be going on.

Reply by NewPhoenix on 7/22/09 7:44am
Msg #296818

This is a new one for me...

I have seen documents many times where the borrower had to sign where they understood that it was their responsibility to cancel any existing automatic payments. Look back through the document file and see if there was one in the package. We can't read or explain or give legal advice but weI might occasionally point a finger at a paragraph like that (without saying a word) as we push a paper across the table. And hmmm, you wouldn't have felt bad if it had happened to a single dad? (putting up my flame shield)

Reply by sue_pa on 7/22/09 7:51am
Msg #296820

I wouldn't look back through anything because I wouldn't be helping this lady one way or another. After I return a borrower's paperwork I have nothing to say to them ... their dealings are between them and their lender and/or the title company in this case.

I personally feel discussing anything with a borrower about what may or may not have happened 45 days after a loan was to fund is WAY beyond the scope of our job.

Reply by SReis on 7/22/09 7:55am
Msg #296821

I've gotten calls from borrowers after the fact a handful of

times BUT I always direct them to title/lender & explain that my role was just to have the paperwork signed & that I am really not involved in the process after that. I would, however, return a borrowers call just out of courtesy & at least explain the above.

Reply by Julie/MI on 7/22/09 7:59am
Msg #296822

I agree with Sue, which is EXACTLY the reason I don't leave a business card. Way too many calls in 2001 and 2002 from borrowers wondering why their taxes were not paid from escrow......I am amazed at the ignorance of people not making a call or two to terminte the auto pay, that they assume, especially if they are refi'ing with the same lender that the "computers" know they are the same customer.

Reply by CF on 7/22/09 6:21pm
Msg #296946

I agree with you Julie/Sue....I never leave a business card with the borrowers either. The borrowers are not my client. The company that hired me is my client....the borrowers are not. Only in forced situations do I leave my card...that is to say when the borrowers asks many times for it. Also, I say "oh I just changed out my purse and I did not re-fill this one with cards- sorry!" Off my back....when I leave the borrwers my contact with them is over.

Reply by NewPhoenix on 7/22/09 8:36am
Msg #296824

This is a new one for me...

Hi Sue. Oh in no way did I mean for her to go back and say anything to the borrower. Not at all! You should never discuss anything with a borrower before, during or 45 days after of course. I only suggested for HER enlightenment that she might look through it to see if there was a document like that there in the package so that she might recognize it in the future. A person should always be able to better themselves and what they do. Since she was so distressed by what happened she "might" be able to help another borrower avoid this same problem in the future. No, not by giving legal advise or explaining anything - but possibly, it just might happen, that a finger rests lightly on such a paragraph in a similar document as she pushes it across the table the next time. If it helps another human being, I hope "finger resting" would not be illegal.

Reply by KimWmsVA on 7/22/09 8:22am
Msg #296823

No need to put up the flame shield. lol. I would feel bad if it had happened to anyone. In this day and time, with the economy, every penny counts.

Yes, she should have discontinued the auto pay. Her loan officer is and should be her primary contact in all regards to her loan. Unfortunately, she failed to do so. I do not feel that it was my responsibility or the LO's for that matter, to remind her to do so.

I guess my issue is that the lender failed to follow their own requirements as written on the loan contract - "will disburse all funds from this agreement within... days of funding" - and then avoiding her.

That is just wrong.

Reply by Gary Boehm on 7/22/09 9:06am
Msg #296827

This is a new one for me...

Yes I feel bad when things like this happen to anyone too. And it seems to hurt the most when it comes to money and institutions that just don't care. So I try to learn from experiences and seek to avoid - or help others to avoid - it happening again however I can which is what I was saying in my other posts. You are right it is not our responsibility. But we can try (within our limits).

I believe that automatic payments are not run by the mortgage companies anyway. I'll bet that they contract with an outside computer company. This is why a borrower must contact the mortgage company and specifically instruct them to stop the payments, so that the mortgage company knows that they must contact whoever DOES the payments to stop!
Once the old mortgage is paid off the mortgage company thinks they are done. Like an old mule (lol) you have to get their attention AGAIN and say "NOW stop the automatic payments"!

It also occurs to me that the old mortgage (in this case) might actually BE paid off, the borrower is just saying it isn't because they see the payments still coming out of their account. In either case with a lot of phone calls she should be able to get that money back I would think. It is the Title company that should have disbursed the funds. If they didn't or it didn't close for some other reason she would need to contact them as well (but you can't tell her all this). Yep she needs to make a lot of calls or get some legal help.
Remember (and somebody correct me if I'm wrong and I'm sure they will) WE are not doing a "closing" at the signing table when we "do" a refinance. The actual "closing" happens three days later after the end of the RTC period. THAT is when the TC is supposed to do the rest of their job and pay everything off. If they didn't...

Reply by PAW on 7/22/09 10:01am
Msg #296831

>>> Remember (and somebody correct me if I'm wrong and I'm sure they will) WE are not doing a "closing" at the signing table when we "do" a refinance. The actual "closing" happens three days later after the end of the RTC period. THAT is when the TC is supposed to do the rest of their job and pay everything off. <<<

You're right, and not quite so right. A closing is a multi-step process that concludes with the warehousing of documents and disbursement of funds. However, the face-to-face review of documents, and the signing of those documents is an integral part of the process. But I agree that it is not the "closing" in and of itself.

Reply by Gary Boehm on 7/22/09 10:10am
Msg #296833

This is a new one for me...

As Felix the Cat used to say... Righty-O!

Reply by Philip Johnson on 7/22/09 10:18am
Msg #296835

I loved him on the Odd Couple n/m

Reply by Gary Boehm on 7/22/09 12:17pm
Msg #296862

Felix Unger? n/m

Reply by BrendaTx on 7/22/09 10:17am
Msg #296834

*And hmmm, you wouldn't have felt bad if it had happened to a single dad? (putting up my flame shield)*

Hmmm...back atcha....cannot blame you for asking that. I was a "single mom" for years and never felt (or allowed others to perceive me) as at a disadvantage because I was a "single mom".

I never liked anyone to perceive me as someone who needed their pity. It's a vicious cycle. If you allow or encourage someone to pity you pretty soon you pity yourself.

Sorry, Original Poster...did not mean to hijack thread with my mini-rant.

Reply by Philip Johnson on 7/22/09 10:21am
Msg #296836

The fact that causes them to call you back is

your face is the only face they see and they make a connection. They and I know that when they call a faceless phone # and get the heave ho, that there is a local person who answers their phone and has a face. I get the calls occasionally, I remind them to call their LO/TC and that soon they will find a helpful person to get it squared away.

Reply by Les_CO on 7/22/09 11:19am
Msg #296843

Re: The fact that causes them to call you back/ long story

Happens to me quite a bit, but I always give a business card…and I don’t mind fielding calls from the borrowers. Sometimes it’s a little scary….Had a call recently where elderly couple did a refi on almost paid for home. Borrowers and Son were at closing. Nice smart people, but English was not the borrowers first language. Get a call from Mr. Borrower about 10 days after signing. “Where’s my check?”…/…”You haven’t received your check?”…/...”No!” …/… “What’s the phone number where you are now, I’ll call you right back.” This closing was for a local Title Company, and I distinctly remember asking how the borrowers wanted their money…I suggested a wire transfer to their account, rather that courier, or US mail because of the large amount. (well over $200,000) or I said they could go to the Title company, in three days and pick up the check (I said, call first, gave them the closers name and phone) They discussed it and said no just have them mail the check. This was sort of an odd loan….Borrowers pushing 80, getting an ‘interest only’ loan, (3.5% 5 year rate lock) large cash out… But… none of my business…And they were both very sharp (intelligent and cognizant) I call Title…. The proceeds check went out AND had been cashed. Apparently the Son had decided to pick up the check. I called the Son…He said yes he had gotten the check for his Dad, and put it into his Dad’s account. I said you better call your Dad. I then called the Borrower, told him the story, and gave him Titles name and number to confirm, and also to call his Son. He said okay. It’s okay if my Son got the check. He wasn’t concerned, ( I was!) just curious.
Indecently…. Some years ago on three loans I closed for a local Title Company, the ‘escrow officer-closer’ took the proceeds out of Title’s Escrow account, and wired it into her ‘friends’ account. When the ‘friend’ went into the bank and tried to withdraw a large amount, saying she had refi’d a couple of income properties, and this was her cash out. The smart banker called Title (where the wires had come from) and had them check it out. The ex-escrow officer and friend are now in Canyon City (I never liked her anyway! Real smart-ass know-it-all)

Reply by MW/VA on 7/22/09 11:11am
Msg #296839

I heard this same story from a friend (I did not do the closing). They refi'd & were supposed to have a July payment skip. She was never advised to stop her auto-draft. Guess what, the payment was taken out & caused her account to overdraft in a big way. You know how that goes, domino effect--check bounces, added overdraft fees, etc. Before you know it she had several hundred dollars in overdraft fees. Lender is supposed to help get it corrected, but it's taken a couple of weeks.
Major stress & she talked with her bank, who was willing to put a "freeze" on her acct. while it is getting corrected.
IMO the LO should cover these issues. I do give my card to every client. I'd had a few contact me and then I can look up my paperwork & refer them to the LO or TC.
Unfortunately, a mortgage being paid off does not stop the auto-draft. Yes, the borrower needs to make sure it is cancelled.

Reply by jojo_MN on 7/22/09 11:23am
Msg #296844

Usually, there is a form in the doc pkgs that are sent to the company being paid off with the loan number and amount asking them to close the account being paid off. That should take care of the automatic payments, but the borrower should also call them and verify that the automatic payments are stopped.

Reply by MW/VA on 7/22/09 11:47am
Msg #296853

This is the misunderstanding--paying off the loan doesn't necessarily cancel the auto-drafts.
It is the borrower who authorized the drafts & they need to be sure to cancel them.

Reply by Gary Boehm on 7/22/09 12:33pm
Msg #296865

This is a new one for me...

Your response is the best one yet! Because you are right - it is the borrower that authorized the automatic payments and it is up to them to cancel it, rather than depending on the Mortgage company to do it for them. AND just because a mortgage is paid off it doesn't mean the automatic payments will stop coming out of their account.

So I must ask - is it giving legal advice to say to someone - "I would check with my bank to make sure my automatic payments are stopped". (Putting in the first person). Or some other better/more appropriate (not legally dangerous) way? I know from my daughter's experience that 5/3rd bank just kills you with fees if you EVER bounce a check. I'm talking hundreds of dollars a day they resubmit a check they KNOW is not covered just to get the fees.

People who do things all the time sometimes forget that other people haven't been through and learned all the "little" kinks and twists that others have. And it can make a BIG difference to them and their lives. If we KNOW about something there should be and there must be some way we can let borrowers know they need to make sure and follow up on this issue. Some way to do it as a kindness, NOT legal advice?

Reply by MW/VA on 7/22/09 1:00pm
Msg #296878

We're never in a position to know if they having their payments drafted or not. IMO the "legal/financial advice" pertains to advising a client as to the legal or financial ramifications of the loan. I don't see the harm is asking, especially when you get to the "Close line of credit letter", if they are doing auto-draft. As you said, it would be just extending a professional courtesy/kindness. Like anything else, the LO's should cover this with them, but we know how that goes.

Reply by Les_CO on 7/22/09 1:33pm
Msg #296882

I disagree!


IMO……."Yours" is the best advice on this post today!
Quote:
“People who do things all the time sometimes forget that other people haven't been through and learned all the "little" kinks and twists that others have. And it can make a BIG difference to them and their lives. If we KNOW about something there should be and there must be some way we can let borrowers know they need to make sure and follow up on this issue. Some way to do it as a kindness, NOT legal advice?” Unote.

Reply by NCLisa on 7/22/09 1:31pm
Msg #296881

My take on this...

I make a point of telling borrowers when we go over the payoff letters to the current mtg company, that if they have auto draft it is up to them to cancel it. It can take 2 to 3 months for a lender to put the breaks on auto draft. You cancel auto draft by calling your current lender. If you try to do it through your bank, they will charge you a stop payment fee as if you were stopping payment on a check. LO's these days don't know Jack.....! They aren't really LO's, they are phone salespeople that know how to sell the product, but nothing else. Most of them aren't even smart enough to ask the borrower, if the closing costs they want to roll into the loan include the escrows. How many times do they forget to roll the escrows into the loan, and the BO's won't sign because they weren't supposed to bring any funds to close?

Reply by ReneeK_MI on 7/22/09 1:55pm
Msg #296885

Because of all the horror stories ...

... I always suggest that auto-drafts to the previous lender be cancelled human-to-human and not left to assumption, AND I also suggest (due to horror stories) that they confirm a few days after it's scheduled that their first auto-draft to the NEW lender is paid (rather than assume!).