Is it legal for a bank to force the buyer to front HOA transfer fees?
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Is it legal for a bank to force the buyer to front HOA transfer fees?
I am closing on a short sale in about 2 weeks. Even though the bank signed off on paying for HOA transfer fees, they refuse to front the money to the escrow company. The bank wants me to pay for the fee and “reimburse” me once I close. If the closing falls through, I lose the money. Is this legal? Would I have the ability to get out of closing and have my earnest money deposit refunded to me?
Asked on August 18, 2011 California
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
The concern that I see with the transaction where you are supposed to close on a home subject to a "short sale" in about two weeks is that the bank which owns the property wants you to pay the association transfer fees for the transaction and reimburse you these once the escrow closes is that assuming you have a federally funded loan, the bank's proposal would appear to be a "RESPA" violation.
"RESPA" violations include , but are not limited to hidden fees concerning a real estate transaction. You need to discuss with your real estate agent what could amount to a "RESPA" violation. From what you have written, what the bank is trying to have you do would be illegal.
Good luck.
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