Category: 
November 19, 2008
It's an FHA home loan and we are supposedly having to get it appraised for more then it is worth. I know we only had to put 500 dollars down for escrow/earnest money but I am wondering what are they going to do with the other eleven thousand? I am a first time homebuyer with really bad credit so I am really thankful for this. IT does all seem on the up and up I just don't understand a lot of it. I know it is not one of those subprime loans and we get a 7% interest rate and our mortgage payment will be 1400.00 a mnth including pmi home owners insurance and tax.
Your lender will know how your offer should be structured. We call it "stacking costs"….when the seller is to pay costs on behalf of the buyer, often the costs are added to the actual purchase price. So if you were buying a $100,000 home and you needed 3% in closing costs from the Seller, you would write the offer for $103,000 with $3,000 back to you as the buyer for closing costs and/or prepaid expenses. The listing agent will need to change the price in the MLS to $103,000 from $100,000 before marking the property "Pending".
If the property doesn't appraise for $103,000 then you will have an option to cancel the transaction as long as it's done before the expiration of your appraisal contingency. In this case, many times the Seller will concede to a lower price rather than put the property back on the market to try and find another buyer.
The expertise of your Realtor will be very important during this offering process. Having to stack costs in this market is almost unheard of. In a Seller's market, it happens frequently.
Keep in mind that the Seller is only allowed to contribute 3% on your behalf. This amount is sufficient to cover all your closing costs. $11,000 is more than double what you should be charged.
Horaayy..there are 8 comment(s) for me so far ;)
From the limited information you have stated here, something does not seem right as to why you are borrowing 180k when the home is only selling for 169k. Closing costs are regulated on FHA loans and 11k seems to be quite excessive. I would definitely ask a lot of questions about this scenario and maybe even talk with another mortgage professional from another company if the answers you get do not make sense to make sure you are "not being taken for a ride". I have been in the mortgage industry for over 10 years and I have heard of a lot of stories of people being taken advantage of. Something doesn't seem right. Even with closing costs, your upfront MIP and escrows for taxes and insurance it should not be 11k on a 169 selling price.
References :
Your closing attorney is the person to answer this question. You can take a look at your HUD-Settlement Statement, their you will see where all the money went to.
I just did this on-line search and found many websites explaining the HUD-Settlement Statement.
I added these two for your convenience.
References :
http://www.alta.org/consumer/hud1.cfm
http://www.alpinetitle.com/settlement.htm
This sounds like a form of fraud to me. Contact an attorney if you do not already have one.
References :
I'm a real estate attorney
Your lender will know how your offer should be structured. We call it "stacking costs"….when the seller is to pay costs on behalf of the buyer, often the costs are added to the actual purchase price. So if you were buying a $100,000 home and you needed 3% in closing costs from the Seller, you would write the offer for $103,000 with $3,000 back to you as the buyer for closing costs and/or prepaid expenses. The listing agent will need to change the price in the MLS to $103,000 from $100,000 before marking the property "Pending".
If the property doesn't appraise for $103,000 then you will have an option to cancel the transaction as long as it's done before the expiration of your appraisal contingency. In this case, many times the Seller will concede to a lower price rather than put the property back on the market to try and find another buyer.
The expertise of your Realtor will be very important during this offering process. Having to stack costs in this market is almost unheard of. In a Seller's market, it happens frequently.
Keep in mind that the Seller is only allowed to contribute 3% on your behalf. This amount is sufficient to cover all your closing costs. $11,000 is more than double what you should be charged.
References :
CA Licensed Realtor
Do not sign anything that you're not comfortable with, as the other posters have stated, something sounds fishy here.
If you don't know why you're borrowing 11,000, leave it on the table.
Resist the urge, walk away.
Seriously.
Runnnnnnnnnnnnnnnnnnnnnnn…
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walk a way, far far far away from this nightmare u are going to step in.
rent a few more yrs , learn to own ur money, learn to make and keep ur money, pay off ur bills, save up real money. don't do this deal. u'll be on the street in 5 yrs.
visit daveramsey.com to learn what these people don't want u to know.
get read study 'house buying for dummies' any of the GOV.sites on house buying.
tear the papers up and consider your self lucky.
if u do not understand compleatly don't do it. don't sign anything more.
References :
foreclosuer server with too much work thanks to under educated buyers and Creative Bunkers
From the little information you gave, it sounds like someone is committing fraud, and you are invloved like it or not. You said you are supposedly having it appraised for more than it is worth. That is a huge red flag, if it truly is being over appraised now the real estate appraiser is committing fraud. $11,000 is way to much for closing cost with a FHA mortgage. Did the lender say this 'extra' money was going to you or is someone else going to pocket this money, like your loan officer? You need a new loan officer, a new appraiser, and a new real estate agent because they are all involved in this scheme. If you were approved once for a FHA loan you will probably be approved again, if you have to find another house. Then contact your local FBI field office, the FBI investagates mortgage fraud. Run!!!!!
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Myself - Real Estate Appraiser
oh ok .. i got this for you…
better check it out, im pretty sure you'll discover something…
http://www.home-loan-made-ez.com/
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