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  1. #1
    Join Date
    Jan 2017
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    4

    Default Title Company Wants a Homeowner to Refinance Mortgage Because They Made an Error

    My question involves real estate located in the State of: Alabama.
    We closed on our house around thanksgiving of 2016. About four weeks after we closed and moved in and had been living there, the title company called and said they had made an error and were at risk of having to buy our mortgage from our lender. Apparently they missed something until after we had closed in moved in the home. Our lender was gonna sell our loan to an investor. The investor wouldn't buy our loan from our lender until we sold our previous home. We were very open and gave all paperwork and debts. The title company missed the part where we had to sell our house before the investor would assume the loan. The title company agent is saying that her company is in danger of having to buy our loan. She suggested a no cost refi after our house sell( it is under contract). We have started the refi process now and our payment would be $100 per month more since it shows my debt for the new house on my credit. What are some options?

  2. #2
    Join Date
    Sep 2010
    Posts
    19,427

    Default Re: After Closing, Title Company Wants Me to Refinance Mortgage Because the Made an E

    I'm not sure what "mistake" you're talking about. Were you not supposed to close until you sold your previous house?

  3. #3
    Join Date
    Jan 2017
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    4

    Default Re: After Closing, Title Company Wants Me to Refinance Mortgage Because the Made an E

    Yes. The underwriters wrote in that I had to sell my previous home first. The title company didn't see it until after closing when the banks investor refused to purchase the loan from the bank.

  4. #4
    Join Date
    Feb 2008
    Posts
    1,151

    Default Re: After Closing, Title Company Wants Me to Refinance Mortgage Because the Made an E

    You did purchase title insurance right? It is my understanding that is there to protect you from mistakes like this. I would not accept a $100 increase in my monthly mortgage payment on the refi though as you are correct that this was not your mistake. The title company should have EPLI or E&O insurance to protect them on their mistakes which should be the difference between now and when the other home closes. I think they are trying to be sneaky and pass the mistake along to you. And I don't see any reason to refi if you have a current contract on the other home. Once it is sold, that condition should drop off and the investor would then purchase the loan. How long is it until you close?

    I would seriously hire a local real estate lawyer to protect your interest at this point.

  5. #5
    Join Date
    Mar 2013
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    17,494

    Default Re: Title Company Wants a Homeowner to Refinance Mortgage Because They Made an Error

    Quote Quoting K10027
    View Post
    What are some options?
    The one option that occurs to me is to tell the title company where to stick their mistake.

  6. #6
    Join Date
    Sep 2010
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    19,427

    Default Re: Title Company Wants a Homeowner to Refinance Mortgage Because They Made an Error

    That might be an option, but if the conditions of his contract with the lender be that he had sold his prior house prior/coincident with the closing, the BORROWER has breached the contract. It' s not the job of the title company to make sure the parties are in compliance with their contractual agreements.

  7. #7
    Join Date
    Jan 2017
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    4

    Default Re: Title Company Wants a Homeowner to Refinance Mortgage Because They Made an Error

    The loan that we applied for was a traditional loan not contingent on selling. When undin underwriting, the underwriter must have written the clause and no one else caught it. Everyone (the title company, and me the buyer) were still under the assumption of the traditional non contingent loan. ( which is what we applied for)

  8. #8
    Join Date
    Sep 2010
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    19,427

    Default Re: Title Company Wants a Homeowner to Refinance Mortgage Because They Made an Error

    The application means SQUAT. Clause where? If it was in the note you signed, you're 100% responsible whether the title company missed it or not. If it's not in anything you specifically agreed to, then it's on the lender (I don't know how the title company enters into this). Parameters between the lender and their underwriter are between them not your or the title company.

  9. #9
    Join Date
    Mar 2013
    Posts
    17,494

    Default Re: Title Company Wants a Homeowner to Refinance Mortgage Because They Made an Error

    Quote Quoting K10027
    View Post
    The loan that we applied for was a traditional loan not contingent on selling. When undin underwriting, the underwriter must have written the clause and no one else caught it. Everyone (the title company, and me the buyer) were still under the assumption of the traditional non contingent loan. ( which is what we applied for)
    Agree with flyingron.

    You need to sit down and thoroughly and carefully read and re-read your loan contract to see if that requirement is in there.

    If it's in there you are about to learn a very painful lesson about reading and understanding contracts before you sign them.

    It isn't up to anybody else but you to catch mistakes or terms you don't like before you sign the contract.

  10. #10
    Join Date
    Jan 2017
    Posts
    4

    Default Re: Title Company Wants a Homeowner to Refinance Mortgage Because They Made an Error

    The bank didn't catch it either because we closed on the loan. We have been paying payment for two months now.

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