Q: We recently purchased a town house condominium in Northern Virginia. We made an offer in October and settlement took place the next month. At the time, we paid our share of closing costs, as outlined on the settlement sheet.
On Feb. 6, we received a letter from the settlement attorney informing us that we owed $100 for a survey of our property that was made in January. The attorney said our mortgage company had indicated at settlement that they would accept the master plat as recorded in the courthouse. However, the investor insisted on a new survey, which we were now to pay for.We were never notified that this new survey was required by our mortgage company.
We are concerned as to whether we are legally responsible for payment for this survey. We thought that once settlement took place, no further closing costs would be required. What recourse do we have?
What is to prevent the mortgage company or the settlement attorney from charging even more in the future for other items?
A: It is a general rule that once settlement takes place, you cannot be hit with additional charges, unless there were mathematical errors in computation, or omissions that you knew about but inadvertently were not charged.
In your case, one of two things must have happened: Either the attorney made a mistake and didn't read his or her loan closing instructions from the mortgage lender carefully, or the mortgage company itself did not have an investor prior to the time of actual settlement -- and then learned the requirements afterwards.
Generally speaking, mortgage bankers do not have their own funds to lend out (as do banks and savings and loan associations), and thus act as a broker between an investor and the borrower. There is a complex and effective secondary mortgage market that services these mortgage bankers, and the requirements to use this market are quite specific.
However, often a mortgage banker will find a private investor who is interested in making the individual loan (or package of loans) and these individual investors may have their own requirements. Thus, it is possible that the investor was unwilling to accept the master plat, insisting on a separate survey of the property.
This is no excuse, however, for the settlement attorney, or the mortgage banker to charge you the additional. $100. I am very comfortable with the legal argument that once the mortgage company has given you a loan commitment, and once settlement takes place in full compliance with the requirements of the loan commitment at the time, neither the mortgage lender nor the attorney can look to you for any additional charges, such as the survey requirement.
The attorney's role should also be analyzed. Sine you paid the attorney's fees, the attorney is ethically and legally bound to represent your interests, unless, of course, there was disclosure at the settlement that the attorney was not representing your interests. If the settlement attorney was your alwyer, ask that lawyer to defend your intessts against the mortgage company, so that you need not pay the additional survey charge.
And, if the attorney made a mistake by not including the survey cost at settlement, you still should not be responsible for that additional charge.
I think you can rest assured that you need not pay any additional hidden extra charges, now that settlement is over.