Q. On July 30, I had settlement on the purchase of my first home. It was an FHA mortgage and the mortgage insurance premium (MIP) was financed. The upfront fee was approximately $5,500 and the monthly MIP was approximately $144. I received a letter on Sept. 18 from the bank that bought my mortgage telling me that I would no longer be required to pay the mortgage insurance premium because it was not disclosed to me in my closing documents and that any premium already collected would be reimbursed in approximately 30 days.
I have not received any reimbursement, but my monthly mortgage bill has been reduced and does not include the MIP. When I called the lender, they told me to check with the title company or the original lender. The title company referred me to that original lender who insisted everything was disclosed correctly and that they never heard of such a thing. They feel that my new lender made a mistake. They agreed to check on it for me, but never called me back.
Who do you think has the money? Do you think I am entitled to reimbursement of the $5,500? If so, I would definitely want to pursue this. If not, I made only one monthly premium of $144, which may not be worth the hassle of figuring out what is going on. Also, if I pursue this, they may indeed have made a mistake and I may then have to begin making the additional payments. What would you suggest?
A. Interesting, I rarely hear of a lender giving up money. I suppose you could independently — without identifying yourself or your loan account number — research the matter. Try reviewing the information about mortgage insurance premiums on the Internet; this may assist you in determining if, in fact, you are obligated to obtain such insurance. Typically, if you do not put down 20 percent of more of the purchase price of your house, you have to obtain MIP. This protects the lender should you go into default.
My take: Don’t rock the boat, but keep the letter from your lender stating that you do not need that insurance. They may come back to you later, and your letter will be your best defense.
More Top Picks Best Poker Tables