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GFE compared to final costs

We are closing on our first home very soon and have hit several bumps in the road.. the seller is Fannie Mae, and when the home appraised lower they took away our closing credit. Not only are we draining our saving because we now have to pay all closing with our 20% down payment.. but all along, every GFE we received stated the seller to pay doc stamps. That $1200 was never factored in, and we are finding out just before closing that NO, Fannie Mae does not pay that fee. Along with other surprise costs, we can barely afford this now. Shouldn't this have been known earlier? Is there something we can do about it?
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November 29 2011 - North Port
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Answers (3)

In Minnesota we have an escape clause in the offer that states that you are not required to complete the transaction if the property does not appraise for a certain amount, generally the offer price.

Since the property you are looking at did not have enough value on appraisal, use the clause to reclaim your earnest money and walk away.

Spending all of your cash reserves for the purchase just sets you up for trouble, and maybe a foreclosure for yourself.

Good Luck!
 
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November 29 2011
A GFE doesn't state who will pay the transfer taxes.

Florida statutes (chapter 201, Florida statutes) state specifically that the documentary stamp tax is payable by any party in the transaction. It goes on to state that if one party is exempt then the tax must be paid by the non-exempt party.

Any Florida agent and loan officer is aware of this statute and would have advised you at the time they were aware you had an exempt seller though responsibility also rests with you, the statute is after all just a web search away on the myflorida.com state web site.

If the GFE you were issued within 3 days of providing the contract to your lender did not reflect the doc stamps on the deed, your lender is paying them, not you.

You can also get your closing costs paid through the use of a lender credit, ask your loan officer to show you how that works. You would then only need the 20%.

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November 29 2011
That's a pretty tough pill to swallow I know. But to be frank, the Fannie Mae purchase addendum spells out the fact that they won't pay doc stamps. You had to have signed that in order to get under contract on a Fannie Mae home. When buying a foreclosure it's absolutely vital that a buyer read the entire contract as well as the addenda. There isn't much you can do about it now without risking your deposit. Sorry you find yourself in this situation.

Nathan Tutas
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November 29 2011
 
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