closing cost problem who should keep the money?

I closed on a loan about a couple of weeks ago. i did a no out of pocket closing. So the day of the closing i found out that the mortgage company lowered there origination costs so that i wouldn't have any out of pocket costs. The other day i got a check in the mail from my insurance company with a returned check that the closing attorney used to pay my insurance, however my previous mortgage company had already paid it. So who should be entitled to the refund? The closing attorney is waiting to hear back from the mortgage company because they say that since the mortgage company lowered there origination fee so i wouldn't have any out of pocket expense than it may go to them. But i feel like that when i signed the loan documents that showed the origination fees at closing than anything that is extra should go back in my pocket.

looking to get some advise from people that are in the mortgage knowledge. Please

thanks

Jason Johnston

You would be entitled to the refund. 

Thanks for your help Kent!

How do i dispute that with the closing attorney/or mortgage company?

It should work itself out shortly, just be patient.

Jason,

In my opinion, I think that refund is your money. You have already closed the deal, the mortgage company got their part and should be on to the next loan. Whenever one of my borrowers gets a refund (insurance, title insurance, MIP, escrow, etc.) I let them know that is their money. I just got paid from the loan closing and anything 'extra' that gets paid to you, should be yours to keep. Is the mortgage company or anyone else saying that you owe them more money? If so, tell them to go pound sand. Your business with them is done once you sign the docs and the loan gets funded.

This is my problem my insurance company sent me the closing attorney's check that was for my insurance. but since it was already up to date they just sent me the check back that the attorney wrote. So i called the attorney's office and said i needed them to write me a check for the refund and i would bring them their check back. But they are waiting on the mortgage company to tell them what to do!

If the closing attys office isn't too far away, stop on by and ask for the trade of checks. Why is the mortgage company even involved in an escrow issue?

I don't think they should be. The attys office is the one saying they have to check with the mortgage company before they will even consider giving me the refund.

Sounds like a bunch of BS to me. Call them on it.

If by chance the Attorney wants to pay the Mortgage Company let him know that by doing so would be a violation of RESPA.  The mortgage company can only be paid what is listed on the HUD1 (Settlement Statement) at closing. No party to the transaction can be paid one cent outside of closing. The Lender placed the money in the Attorney's escrow account on your behalf to pay the insurance, the money came from your loan proceeds and if there is an overage then the balance is refunded to you.

I have never looked at these forums before but some of you should know better than to respond the way you have. You have no idea how much cash this borrower recieved or did not recieve at his closing. You also have no idea if he did a cash out or no cash out loan so the advice is contact your lender and title company. You will get correct and accurate information that is not based on internet speculation.