So frustrated over taxes not collected at house closing

[POOHDRMR]

We closed on our new house on Sept 17 and the taxes were due on Oct 1.We received a tax bill for the old owners the begining of January and it wasn't sealed and I new it was a tax bill so I looked inside.It said the taxes were late and now there was a penelty.I figured it was just an oversite but we contacted the mortgage company to make sure the taxes were paid at closing.They said that because closing was so close to the tax date the title company would have taken the money and paid it.We contacted our lawyer and she was looking into it and then on friday said the title company said they didn't pay them the mortgage company must have paid them.Today she emails us to tell us that she made an oversight and didn't relize that the taxes were not paid at closing(we paid the sellers the 3 months of taxes they had already paid ahead for the rmaining year but the Oct taxes were for the next year)Now our estimated closing costs were around 14,ooo going into closing that day-we ended up paying almost 16,000.She said it was very unusual that she or the title company didn't realize it the day of closing and she was sorry and would pay the late fee but now we owe 4200 dollars before the end of the month or the penalty goes up.I know I should have paid them at the time but I thought that we did and we have been renovating the entire house while living in an apartment that was in the house.If we knew we had 4200 less we would have adjusted the reno budget.I don't know why I hired a lawyer-we also wound up with a dry closing the day of closing because she didn't get something done in time and the bank didn't get the money wired over in time.We had untill the next morning at 10 to get the money or we would have had to go through closing again.So needless to say we have to come up with the money from an already tight budget and our hopes of going away this summer just went out the window

 

[mad madam mim78]

We closed on our new house on Sept 17 and the taxes were due on Oct 1.We received a tax bill for the old owners the begining of January and it wasn't sealed and I new it was a tax bill so I looked inside.It said the taxes were late and now there was a penelty.I figured it was just an oversite but we contacted the mortgage company to make sure the taxes were paid at closing.They said that because closing was so close to the tax date the title company would have taken the money and paid it.We contacted our lawyer and she was looking into it and then on friday said the title company said they didn't pay them the mortgage company must have paid them.Today she emails us to tell us that she made an oversight and didn't relize that the taxes were not paid at closing(we paid the sellers the 3 months of taxes they had already paid ahead for the rmaining year but the Oct taxes were for the next year)Now our estimated closing costs were around 14,ooo going into closing that day-we ended up paying almost 16,000.She said it was very unusual that she or the title company didn't realize it the day of closing and she was sorry and would pay the late fee but now we owe 4200 dollars before the end of the month or the penalty goes up.I know I should have paid them at the time but I thought that we did and we have been renovating the entire house while living in an apartment that was in the house.If we knew we had 4200 less we would have adjusted the reno budget.I don't know why I hired a lawyer-we also wound up with a dry closing the day of closing because she didn't get something done in time and the bank didn't get the money wired over in time.We had untill the next morning at 10 to get the money or we would have had to go through closing again.So needless to say we have to come up with the money from an already tight budget and our hopes of going away this summer just went out the window

Aww that stinks! I swear some people need to learn how to do their jobs. I love the word "oversight". They should say "I totally wasn't frickin paying attention to an important detail and I suck". I hope you love your house though. Congratulations!

 

[Cheshire Figment]

I would look into going to Small Claims Court and going after the company that handled the closing to have them pay all late fees and penalties.

 

[clh2]

I would look into going to Small Claims Court and going after the company that handled the closing to have them pay all late fees and penalties.

This.

I don't always "requote" a previous poster. This is YOUR MONEY, and it is substantial. Someone dropped the ball here, and you should not be responsible for it.

 

[POOHDRMR]

The lawyer knows she screwed up royally because she said she will send us a check for the late fees-without us even asking.So you know she even thinks she sucks! She said she was sorry for the inconvience-like I said we should have paid them I am not arguing that but we already came in higher than we had been told closing costs would be and we would have known we had less for renovations before I already was in the middle of the whole house being torn apart.I will love it when it is done if I can make the payments!!We sold our old house for nothing because our area had gotten really bad and the schools were not what we wanted for our kids and bought in a great area but the house needed alot of work.It was a 2 family and we are converting it back to a 1.Just needed to vent-it just seems like nonone does there job anymore.Thanks for the ears

 

[Weluvdisny]

Are you escrowing taxes with your new bank? If yes, and you haven't paid the outstanding bill yet, what we would do at the bank I work for, is cut a check from your escrow account. It would make your balance less than it should be, but you could then make up the difference over the next year instead of having to pay for it all at once if the funds were tied up in renovations.

 

[Darcy03231]

Call the attorney back and let her know this is her problem. Let her know if she doesn't take care if it right away then you will file a complaint with the bar association.

I used to work in a law office that did real estate closings and this a major screw up on the part of the attorney.

 

[allison443]

Call the attorney back and let her know this is her problem. Let her know if she doesn't take care if it right away then you will file a complaint with the bar association.

I used to work in a law office that did real estate closings and this a major screw up on the part of the attorney.

OP said in her first post that the attorney already offered to pay the late fees.

OP at closing you should have gotten a settlement statement (in my state it's called a RESPA form). I would look through that carefully, line by line. You said closing costs were higher than you thought, but this tax amount wasn't paid? Was it never included in the original estimate of your closing costs, or was it mis-allocated at closing, etc.?
Also are you not escrowing your taxes with your mortgage co?

Good luck with your new home in spite of this!!

 

[POOHDRMR]

We are escrowing the taxes with the bank but the first installent of the school taxes were due by Oct 1 and we closed Sept 17 so we were supposed to pay those up front at closing-it was even a condition of the mortgage that if taxes were due within 60 days of closing they had to be paid at closing.I know the lawyer knows this was a major screw up for her to offer up paying the late fees.We went through all the documents trying to figure out what everything we paid for was and the only thing that came out higher was all the fees to the title company.We closed on our old house the day before buying the new house and she gave us the estimated costs that day and actually had us getting a credit because the good faith estimate was off by a certain amount to the hud 1 so she said we were getting money back but then the next day at closing said it was figured out wrong and we owed moneyWe asked her for a breakdown of what all the money was and are waiting for that-she didn't even call us she emailed.I don't understand how they could mess this up.She was very unprepared it seemed-we had change dinsurance companies 2 weeks before closing and both us and the mortgage broker had sent her the info and she replied to it in an email and then at closing had the old insurance info and tried to say we din't tell her.My dh pulled up the email on his phone and showed her and she was like oh ya it was a last minute change though(2 weeks is last minute)There was a bunch of things,she didn't change the days to be out of the house that we had agreed upon from 5 to 3.Talk about a bad experience!I wish there was something I could do about it-but I do understand that I should have paid them in the first place but she really sucked as a lawyer!

 

[jgreco]

I really hate when you spend good money on a lawyer and they drop the ball. We hold a promissory note and because of a typo by the other parties lawyer that ours did not catch, we are being shorted $6k over 5 years. We signed it (thinking the math would have been figured properly) so there is nothing we can do about it. I still get mad when I think about it!

 

[Jeff_G]

I would check your title insurance policy and see if there is an exclusion for the current year's taxes. My policy specifically excluded the current year property taxes, but if yours does not exclude them I would open a claim with the title insurance company.

 

[ccgirl]

We closed on our new house on Sept 17 and the taxes were due on Oct 1.We received a tax bill for the old owners the begining of January and it wasn't sealed and I new it was a tax bill so I looked inside.It said the taxes were late and now there was a penelty.I figured it was just an oversite but we contacted the mortgage company to make sure the taxes were paid at closing.They said that because closing was so close to the tax date the title company would have taken the money and paid it.We contacted our lawyer and she was looking into it and then on friday said the title company said they didn't pay them the mortgage company must have paid them.Today she emails us to tell us that she made an oversight and didn't relize that the taxes were not paid at closing(we paid the sellers the 3 months of taxes they had already paid ahead for the rmaining year but the Oct taxes were for the next year)Now our estimated closing costs were around 14,ooo going into closing that day-we ended up paying almost 16,000.She said it was very unusual that she or the title company didn't realize it the day of closing and she was sorry and would pay the late fee but now we owe 4200 dollars before the end of the month or the penalty goes up.I know I should have paid them at the time but I thought that we did and we have been renovating the entire house while living in an apartment that was in the house.If we knew we had 4200 less we would have adjusted the reno budget.I don't know why I hired a lawyer-we also wound up with a dry closing the day of closing because she didn't get something done in time and the bank didn't get the money wired over in time.We had untill the next morning at 10 to get the money or we would have had to go through closing again.So needless to say we have to come up with the money from an already tight budget and our hopes of going away this summer just went out the window

So frustrating! I had a similar thing happen but it was with Homeowners Insurance. We refinanced WITH THE SAME BANK. We had not escrowed homeowners in the past but we were required to with the refinance. I told them they better make sure the insurance gets paid. Sure enough, they didn't and the homeowner's got cancelled and I was dropped due to nonpayment. I had to find another Homeoweners Insurance company - which was not easy.

I wonder if you can get the late fees from the lawyer,mortgage,title company?

 

[1Mouse2RulethemAll]

Someone already said it, but. check your title insurance.


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[anna08]

I know this sounds even more burdensome, but it might be worthwhile to get another real estate attorney to read and interpret your closing documents thoroughly. It seems to me that both your attorney and title company have some responsibility here, especially as that amount might have been added to your mortgage so that you did not have to pay it out of pocket. Nice of you to post this though as a lesson to all of us to ask questions/read documents despite paying folks to do that for us. We had a closing nearly fall through due to what I am now convinced was an idiot of a realtor. I would report it to the Bar Association in your state at a minimum - that way it will not likely be something this attorney will ever forget to check again in the future. Good luck!

 

[emmababy]

The taxes due should be the sellers responsibility. All, title fees can't increase more than 10% than the gfe. There should be a breakown of the two on page 4 of your HUD.

You are not responsible fr taxes due for a period that you don't own the house. Unless you were given a large credit fom seller at closing, this is their bill, not yours.

 

[anna08]

...the Oct taxes were for the next year)Now our estimated closing costs were around 14,ooo going into closing that day-we ended up paying almost 16,000.She said it was very unusual that she or the title company didn't realize it the day of closing and she was sorry and would pay the late fee but now we owe 4200 dollars before the end of the month or the penalty goes up.

I think usually property tax bills are for the upcoming year. I would consider paying what you can now, then paying the rest off as soon as you can - at least the amount with a higher penalty will be less. You could also consider asking the attorney to pay any additional late penalties for extending the payment out a few months. You'd have to detail this out in writing in order to protect both parties. The attorney should be able to do this for free.

 

[Boston Tea Party]

OP said in her first post that the attorney already offered to pay the late fees.

I don't think that is her issue, and it wouldn't be mine, either. Paying late fees ain't gonna cut it.