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Am I entitled for refund?

I recently refi from 30yrs FHA to 20yrs conventional. I closed last Oct 29 and the fund was released last Nov 5. I'm due for my 1st monthly payment on Dec 1 (to my new lender). The pay-off statement from my previous lender shows that they included interest from Nov 1 - Dec 1 on top of my principal balance since it is FHA loan. If the fund was released last Nov 5, should I get back the money paid for interest from Nov 6 to Dec 1?

Note: I already paid for month of October (due on Nov 1) prior to the closing.  I already got refund from my previous escrow.
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November 18 2013 - US
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Answers (8)

Go Gators!
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November 19 2013
Unfortunately, you also paid an extra month prorated MI payment in addition to the month's interest. It's a pain but if planned for it can be avoided.   
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November 19 2013
FHA allows, but does not require, 30 days interest when the loan is paid off after the 1st of the month. It is the lenders choice to charge  30 days interest.

The underlying reason is that most FHA loans are securitized to Ginnie Mae and Ginnie Mae guarantees its investors a full month's interest on any loans in the pool.

There's a great likelihood that should FHA no longer allow the 30 days interest then FHA pricing would simply increase.
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November 19 2013
The CFPB should investigate this travesty of justice. HUD should should fine themselves. Congress should refund all this revenue. The "people" should revolt.
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November 18 2013
Your loan officer should have managed your file better and saved you a considerable amount of money. Make sure you voice your displeasure with them.
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November 18 2013
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Thank you for your replies.  It is really informative.  Goodbye $$$. :p I'll charge it up to experience.
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November 18 2013

This is a "gotcha" that has been around forever, and fortunately it only applies on the pay off of an FHA loan. Not sure why or how they have been able to get away with what is obviously pre paid interest penalty. It is important that consumer's know this rule, as not all Agents, Lenders or Buyers are aware of it. On larger loan amounts 29 days interest can be $1,500+ but it is all relevant. Bottom line is be sure pay off of FHA loan is received by current lender prior to the 1st of a month. This is particularly important refinancing "old" FHA loan as there is a 3 day right of rescission (holidays and Sun. don't count) from date of closing to date of funding. Having a closing when an existing FHA loan is involved is ideal if close to 25th of month (not counting Feb.) as less chance for much "double" interest to pay.

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November 18 2013
Sadly no refund entitled...FHA charges a full Month on Interest when a loan is paid off early (which the refinance did-essentially paying off the old mortgage). While there is no prepayment penalty-they do charge a month's interest. There is an article on the latimes website from April 3, 2011 that spells out the nonsense. Sorry! I can't hyperlink here...but just google FHA final month of interest and you'll see some feedback in numerous articles.
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November 18 2013
 
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