Q: Several weeks after closing on a vacation home in Hawaii, I discovered that I had been double-billed for some of the closing costs.

The bank paid the broker’s fee and the flood certificate fee out of our home equity loan, but the escrow company charged us for these same fees as part of our closing costs.

I contacted the bank and they indicated that it was not their problem. I contacted the broker, but got no action. The escrow company is located in Hawaii and they have not been communicative with us as we live in California.

Is there someone who is culpable, or have I just learned an expensive lesson for not reading the loan and closing documents prior to signing?

A: I don’t know if this was an expensive lesson for you. You will need to do some more research. You mentioned that your bank paid a broker’s fee and flood certificate fee in the home equity loan. Was your equity loan part of a series of loans in which you got a first mortgage and also an equity line?

If you obtained two loans, it’s probable that both loans had similar fees and that your payment made through escrow was appropriate. If you only closed on a home equity loan and no other and you closed the equity loan through escrow, the escrow company would have a record that the payment made for the broker’s fee and the flood certificate were paid to your lender to reimburse them for the fees or directly to the broker and flood certificate company.

You might think that you paid it twice, but you need to make sure that your lender did not credit you at closing for these prepaid fees and then had the escrow agent pay them to the appropriate parties. Also, you need to make sure that any amount that you prepaid the lender was for these fees and was not applied to other fees that you did not pay at closing. Frequently, money paid upfront to a lender is used to pay for appraisals and credit reports.

Before you move forward and accuse the lender of double-billing you, make sure you understand the closing statement and fees and understand what you paid for at closing and what you paid for prior to closing.

If you determine that there was only one lender in your deal, that the escrow company paid the fees out of your funds, that you had previously paid the lender for these fees by check, and that the escrow company followed your lender’s instructions, then you will have to contact the lender to be reimbursed.

You’ve indicated that the lender was non-responsive to your communications, but if you have verified the double payment and they still won’t respond to your requests, you can file a complaint against the lender with the Hawaii Department of Financial Institutions (http://www.hawaii.gov/dcca/areas/dfi), with the attorney general’s office of Hawaii (http://www.state.hi.us/ag) or with the Department of Housing and Urban Development (http://www.hud.gov).

Frankly, if the lender over-billed you, you should start with the lender and ask to speak to a supervisor. Follow up each of your calls with a written letter that requires a signature receipt and make sure you keep copies of all of your documentation and who you speak to.

Published: Dec 26, 2005