Great Western Bank - At closing we, the sellers, were charged the closing/settlement/escrow fee (HUD Statement line 1101) of $238.14, normally charged to the buyer

Great Western Bank - At closing we, the sellers, were charged the closing/settlement/escrow fee (HUD Statement line 1101) of $238.14, normally charged to the buyer

Great Western Bank

My wife and I recently sold our home in Rapid City, SD, to a party that secured its VA loan through Great Western Bank (14 St, Joseph St, Rapid City, SD 57701, 605-343-9230). At closing we, the sellers, were charged the closing/settlement/escrow fee (HUD Statement line 1101) of $238.14, normally charged to the buyer.

The title company that prepared the closing, First American Title, said that the fee was charged to us as directed by Tom Laseen of Great Western Bank, the buyers’ loan officer. Mr. Laseen stated in a phone conversation on 31 Mar 04 that the VA requires that fee be charged to the seller, as the buyer is not allowed to pay it under the terms of the VA loan. As discovered upon verbal inquiry with the VA and as stated in the VA document, The VA Home Loan Program for Real Estate Professionals, Mr. Laseen’s statement was not accurate. The following is an excerpt from the aforementioned document:

In addition to the “itemized fees and charges,” the lender may charge the veteran a flat charge not to exceed 1% of the loan amount. The lender’s flat charge is intended to cover all of the lender’s costs and services which are not reimbursable as “itemized fees and charges.” The following list provides examples of items that cannot be charged to the veteran as “itemized fees and charges.” Instead the lender must cover any cost of these items out of its flat fee.

- loan closing or settlement fees [amongst a list of

others] (https://www.homeloans.va.gov/docs/March_20_2002_student_materials.doc) The purchase agreement for the sale of our house states, “Escrow closing fee is to be paid by Buyer unless required by VA to be paid by Seller.” However, as stated above, the VA does not in any way direct or require that the seller pay the closing fee; it only directs and requires that the buyer does not. Moreover, Great Western Bank has charged the buyers the 1% flat charge described above, and is not using it to pay the settlement fee.

I have spoken with Mr. Laseen’s manager, Lloyd Sohl, who in consulting with Mr. Laseen, decided to let the charge stand as is. My assumption is that if Great Western Bank has been wrongly charging sellers for this fee for years, it would cost them much time and money to go through records and make reimbursements – this concern obviously does not make it fair. In the future, this gray area and subsequent dispute could easily be avoided by clearly stating in the purchase agreement who will pay the closing fee. In the meanwhile, however, I am writing for Great Western Bank to reimburse my wife and me the full closing fee, and as they have absolutely denied that request, I am writing to publicize their wrong. Aneel A

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