Closing Error

[jwkidd3]

So we sold our 300 pt BCV to a nice couple. All was going well. We received the closing documents from the closing service we were using. Our proceeds looked a little larger than we expected but hey maybe we really did pay in that much! We sign all the documents and off they go. A week later we receive our check in the mail and all is well.....or so we thought. I receive a call today from the closing service. "Ummmm.... we made a mistake in the amount of your loan payoff by $9900. We need you to write a check to us." I ask what happened. They respond that at the same time our contract was closing that another contract with the same last name was also closing and Disney gave them the wrong payoff numbers. Ugghhh.. And, they are going to have to go back to the buyer and ask for more money because of a mis-calculation on the maintenance fees. Now I understand that we all make mistakes. But this document was in their hands for WEEKS before it was sent.
And to top it off, I looked on the Orange County records site and the deed has been recorded!!!!!

What would you do. Do I have any recourse?


John

 

[dianeschlicht]

Boy, that's a tough one. I would contact an attorney who deals in contracts and closings and see what he says.

 

[JimMIA]

I would follow Diane's advice and talk to a real estate lawyer.

It sure sounds like sloppy business practices (and I don't believe their "...the dog ate my homework" excuse for a minute -- that is just inexcusable slop. Those kinds of errors are precisely what a title agency is utilized to avoid, and there is no excuse for such a blatant error.

Having said that, I'm pretty sure an attorney will tell you to pay. There's a legal theory called something like "unwarranted enrichment" which says you are not entitled to unjustifiably benefit from some else's stupid mistake.

The attorney might take the "let them sue you for it" approach, reasoning that the closing agent has "errors and omissions" insurance to cover such situations, but I'm not sure that would be sound advice. It would be good advice for the lawyers involved, but probably not for you.

 

[CarolMN]

I'd pay, too - if after I looked it over, I thought they were now correct. Be sure to make them prove it to your satisfaction.

Then I'd send a written letter of complaint to the CEO of the closing service. I'd also send a copy to the BBB and whatever regulatory agency might have jurisdiction over real estate closing services. In the letter, I'd ask for a refund of any fees I paid to the closing service since they didn't do the job properly.

Nothing may come of the letter, but I don't think it will take much time to do, it will warn others of the sloppy work practices of this company and might encourage the closing service to institute some "quality control" processes.

Sorry this happened to you.

Best wishes -

 

[dis-happy]

Do their figures mesh with your figures? Did it seem like you were getting 10k too much in your final check? I would ask for copies of the estoppel and other paperwork and do your own mini-audit. As far as the maintenance fees go, if the closing company didn't get the right fees from the buyer (and the buyer now refuses to pay up), it seems to me that the closing company should be on the hook for those. What did the original contract say about the maintenace fees?

Finally, which closing company is it???

Sorry to hear you are going through all this...

 

[manning]

You can't benefit from an honest mistake. If a contract says you should get 500 dollars then you are entitled to only 500 dollars. Same as if a bank puts an extra 10,000 dollars into your account. They are entitled to get it back.

 

[jwkidd3]

No doubt the right thing is to pay back what is not owed.

The way it has been settled is that I am writing a check for 9900 back to the closing company. I asked that they cover any interest expense and the stop payment fee I incurred to make sure Disney did not draft my account again. They agreed to both.



J

 

[rayelias]

If you weren't entitled to the $9,900, why would you even think that you have any right to keep it? Mistakes happen.

If the shoe were on the other foot, how would you feel if, because of a mistake, you were out $10k? Probably not too well?

And to add insult to injury, how would you feel if the person who, by mistake, got an extra $10k out of you, and then wanted to know if they had any "recourse?"

What recourse? It's not your money.

 

[dianeschlicht]

If you weren't entitled to the $9,900, why would you even think that you have any right to keep it? Mistakes happen.

If the shoe were on the other foot, how would you feel if, because of a mistake, you were out $10k? Probably not too well?

And to add insult to injury, how would you feel if the person who, by mistake, got an extra $10k out of you, and then wanted to know if they had any "recourse?"

What recourse? It's not your money.

I think you missunderstood. The OP DID return the money. The question is if there is any recourse.

 

[TheRustyScupper]

1) Definitely talk to an attorney.
2) This could fall under the Closing Company's insurance.
3) All have "Omission and Comission" liability insurance.

 

[rayelias]

I think you missunderstood. The OP DID return the money. The question is if there is any recourse.

I understand that, and to me, that's a no brainer.

What really concerns me is all the talk of "contacting an attorney" and "seek recourse".

It's one thing if it's gross negligence. But, to me, it seems like an honest mistake.

Everyone is so "sue happy" anymore - trying to "get rich quick" off of any minor excuse imaginable.

What "recourse" could there possibly be? Was anyone damaged or harmed in any way?

People make mistakes. Heck, I make a few every morning before my feet even hit the floor. It just bothers me that one of the first things that was brought up was "what can I get out of it?" Just because someone (or some business) has insurance doesn't mean that, "Hey, it's there, let's go see what I can get out of it!"

I think it was very professional that the closing company offered to pay for any "lost interest". Honestly, I don't know why the OP should get any "lost interest". THEY were the ones that benefitted by having the extra money the whole time. Technically, the OP is the one that earned (unjustly) any interest, yet they want recourse?

If ANYONE is due recourse, it's the buyer for having (mistakenly) paid extra. It doesn't seem that they're getting their panties all in a bunch over the $0.15 in interest (and lost availability of that cash).

The other thing that sticks out as peculiar to me was the OP comment that "Our proceeds looked a little larger than we expected but hey maybe we really did pay in that much!" Cummon. You didn't notice an extra $10k?

I'm an employer. It's very funny when there are payroll errors, an employee will notice that their check is short $1.00. But, if the error is in their favor by $100.00, they don't "notice" it.

To me, it all boils down to... if the situation were reversed, how would you like it handled? There's fair, and there's taking advantage.

 

[jwkidd3]

No doubt errors happen. I have made them in business and so have thousands of others. One of the important things in a real estate transaction is to find out the legalities to find out your exposure for someone elses mistakes. That is what I meant by recourse. Of course I would not keep what was not mine. Again, we all make errors. BUT the closing company should make good on this and cover any expenses that are necessary to cover their mistake after the money is returned. I am a believer that a problem is an opportunity to gain long term customers and it all depends on how it is handled. In my case, the contact I have at the closing service is pitching a fit about covering my stop payment fees and certified check fee. That is unreasonable in my opinion. You often pay for your mistakes. Just the way it is. (And by the way, they were even wrong about the amount I needed to send them. The amount I got from Disney for the payoff and the amount they asked me to send was not the same!) So how much is the closing company out in this situation? Oh about $34.

John

 

[jwkidd3]

I did not think that I deserved th $9900. Maybe recourse is not the correct terminology. Exposure probably is a better one.

 

[JimMIA]

John,

Here's a link to a thread I started a couple of months ago due to some other resale/closing issues that came up. It has the correct contact info for the appropriate regulatory agencies here in Florida for both realtor issues and title (closing) agent issues.
http://www.disboards.com/showthread.php?t=772822&highlight=problems/fraud

You may want to let the appropriate agency know about the problem you encountered. Sometimes mistakes like this are symptomatic of much deeper issues, and only the regulators can really determine that.

Just because the effect you saw was in your favor doesn't mean there isn't a serious problem elsewhere. In fact, there just about has to be a big problem somewhere else or they would have been out of balance and would have caught the mistake before they ever issued your check. Seems to me, from what you've posted, that their escrow accounts have to be pretty messed up (something which is theoretically impossible)...and that's potentially a real problem for consumers.

The regulatory agency won't start a witch hunt. They'll compare whatever information you give them with other information they have about the closing agent and determine whether they need to inquire further.

 

[rayelias]

No doubt errors happen. I have made them in business and so have thousands of others. One of the important things in a real estate transaction is to find out the legalities to find out your exposure for someone elses mistakes. That is what I meant by recourse. Of course I would not keep what was not mine. Again, we all make errors. BUT the closing company should make good on this and cover any expenses that are necessary to cover their mistake after the money is returned. I am a believer that a problem is an opportunity to gain long term customers and it all depends on how it is handled. In my case, the contact I have at the closing service is pitching a fit about covering my stop payment fees and certified check fee. That is unreasonable in my opinion. You often pay for your mistakes. Just the way it is. (And by the way, they were even wrong about the amount I needed to send them. The amount I got from Disney for the payoff and the amount they asked me to send was not the same!) So how much is the closing company out in this situation? Oh about $34.

John

Exposure. Now THAT'S a different story, and I agree 110% on you with that. And, I apologize if you thought I suggested you deserved the money. Based on your posts, I deduced that you never considered keeping it.

And, I completely agree that the closing company should definately reimburse you for any additional expenses (such as overnighting things, or stop payment fees), since it was THEIR mistake.

My general beef was not with you or this situation. As soon as I saw a couple posts suggesting "consult an attorney" coupled with mentions of "that's what E&O (errors & omissions) insurance is for", I figured some were suggesting you should sue for a quick buck over a simple, honest mistake.

By the way, I'm sorry to see you're leaving the DVC family (especially at such a great resort!) Are you out completely, or was this an add-on contract you got rid of?

Best of luck in the future, and I hope you continue to enjoy WDW, even if it's not in DVC!

 

[dianeschlicht]

I think whenever you are dealing with any kind of financial transaction, if there is an error, it is usually caught before any checks change hands. It bothers me that this was not the case here. Things like this can not only be a sign of deeper problems. It might not constitute fraudulant actions, but it could be an internal problem with an employee.

 

[Alexander]

I'm just curious that the OP didn't think it was odd to receive 10k more than expected. I could see it being a couple of hundred, but HELLO! There was clearly a mistake made. I wouldn't have even cashed the check until I clarified the amount with the company. I mean you must have had some idea how much money was coming your way. A difference of almost $10,000 could not have been realistic.

 

[dis-happy]

I would be extremely cautious in this situation as well. It sounds like, from what was first posted, that the closing company has messed things up big time. If it were my money, I would want to see original documentation from Disney regarding the exact amount of the loan payoff, what fees are being paid out on my side of the ledger (transfer fee? sales commission?), and an exact accounting of the maintenance fees, since there is a problem there too. I would also want to see a copy of the certified check the seller sent in to ascertain what I'm now being told is true. There's no place for sloppiness in closing and this situation looks like red flags going up all over the place, even if it is "just an honest mistake". But still, this is the closing company's business and credibility here. If looking over all these figures does not make sense to the OP, I would certainly run to an expert if in his shoes. 300 BCV shares times $80 pp minimum is a $24,000+ transaction, for heaven's sake. And while the extra 10k at closing should have sent of bells of warning to the OP that something wasn't right, it sounds like he was so unsure of the figures that maybe it was plausible. While of course he would not keep any money he is not entitled to, at this point in the game it would be prudent to double check everything now being told before refunding money. Make sure they are not asking you to pay for those disputed maintenance fees! Also, please tell us which closing company you used....

 

[mikesmom]

I agree that the OP should have concerns. The reason you bring a closing company in on these deals is to dot all the "i s" and cross all the "Ts". It is their job to be scrupulous about covering all the details of this type of transaction. It is a position of trust. They are the unbiased neutral facilitator. This is the ONLY reason they are in business, otherwise two parties could just take care of it themselves.

It appears the housing boom has encouraged companies to get rushed and sloppy or new companies that are not sufficiently experienced to jump into the field. Mistakes in this type of transaction are serious. They can have immense impact on the finances and ownership clarity of two different parties.

DH and I re financed our home about 3 years ago. He is in finance and knows how to read these contracts. He had the closing company fax us a copy early. We had to have it redone twice because of their errors. When we finally got over to the closing, they had made an additional error - we had to wait 2 hours while they redid the papers a third time. It's pretty frustrating when you have to have oversight on the company who should be doing the oversight!

I agree that someone in the state should be given a heads up about the situation. Lives can be seriously affected if you realize a mistake years later and ownership, inheritance or other factors about a piece of property are suddenly in question.

 

[rayelias]

From all this feedback, I have to conclude that there have been quite a number of problems with title companies and DVC transactions in the past.

I've only been involved purchasing a resale once (through TTS), and it was flawless. Not to say that there aren't disreputable companies out there, but, I am alarmed at the level of response that is being raised here.

First, there was a mistake. Granted. However, the closing company was the one that FOUND the mistake. It doesn't seem that there was anything untoward going on here. The reason sounds legitimate - same/similar name closing at the same time. Yeah, sometimes there can be mistakes. Sometimes someone will enter in the wrong number on the computer and $5000 becomes $50000. The point is, it seems that throught the checks and balances at the closing company, they found the mistake and are trying to rectify it.

Sure, it could be a problem of something more systematic. Or it could be an honest mistake. Is it something to fly off the handle about? I don't think so. If there was something unscrupulous going on, that "extra" $10k would be "missing". It was just misapplied. It's not like the closing company was trying to embezzle an extra $10 out of the deal. If so, the seller surely wouldn't have had possession of it!

Again, this MAY be a symptom of more systematic problems. But it might not be.

Let me present a hypethetical situation to some of you parents who are quick to "call the authorities." Let's say you're at WDW, and your 3 year old child is behaving horribly. Has been all day. It's hot, you're cranky, your spouse is cranky, the kid won't shut up. He's been annoying you and everyone else all day. You're embarrassed and you're getting fed up. Maybe during one of your child's fits, you, without thinking, bend down to his level, grab him by the arms, and angrily express your displeasure to him, maybe even threatening to punish him if he doesn't behave. You're normally a very patient, loving parent who never, ever raised your hand to your child, but you're REALLY frustrated. You're not going to hit him, but you really look ticked!

Not too far fetched. As a matter of fact, I've seen and read a whole lot worse. So, I'm a bystander and I don't know you. I don't know you're a wonderful parent. For all I know, you beat your kid every day. I see is you, red in the face, looking like you're going to shake your kid and hit him at the first opportunity. What do I know, you're expressing some very aggressive behavior, you could snap at any minute. Should I call child protective services, make you sit through hours of investigation, and possibly be "watched" for several weeks to make sure you're a fit parent?

Or, here's another scenario (I won't be so verbose this time, I promise!). You're driving in your car, your thoughts wandering. You don't notice that the light ahead just turned yellow. You have a split second to decide if you should slam on the brakes, or give it some gas. You decide to go for it, but the light turns red just as you get to the intersection. I'm the guy behind you, and based on my perception, you're an aggressive, potentially reckless driver. How would you feel if I called 911, gave them your license plate info, and you got pulled over and raked over the coals, delayed for 30 minutes, and possibly ticketed over a simple mistake?

Mistakes happen. This one doesn't seem to be a serious, blatent, intentional error, based on what I've read so far. And some of you are ready to sue and put this company out of business! What if it was you who was the title clerk, and you always do an exceptional job, but this one time made a simple mistake, one might I add that was caught and corrected. Should you lose your job over this?

It's different when the shoe's on the other foot, isn't it?