Need help oon HUD 1 Statement--UPDATED

[Tooliebell]

I need help understanding the HUD statement and what we need to bring to closing.

House was on market for $149,900...we offered lower but he held steadfast.  If we offered full price we wouldn't have enough for closing, so we offered $154700 with 4800 credit toward closing costs.  The first lender we had gave us the 4800 figure.

Offer was $154700 with 4800 for closings cost.

My HUD statement shows that the seller pays $3198.39.  My cash to closing is 4039.50.  Which is pretty close to dp of 3.5% =5425-1000(earnest money)-375 (appraisal fee)=4050.00

The HUD says this:

Contract sales price---154700

Settlement charges  --5620.49

Gross Amount Due from Borrower=160320.49

Deposit =1000

Principal Amount of new loan=150767

Additional Deposit = 375

Owner's Policy = 877.5

Seller paid costs = 3198.39

Adjustments for items upaid by seller 

City taxes =37.09

County taxes=26.01

Total paid for by Borrower =156280.99

Gross amoutn due=             160320.49

Paid by borrower =              4039.5

He the seller pocketing extra money because the closing costs were lower than expected?

[StartingOver10]

Yes, the seller is getting the difference between what you put into the contract ($4800) and what was the actual amount provided as a credit ($3198.39).

FHA requires you to pay 3.5% for your down payment and the seller can not contribute to that portion, as you noted in your post.

[Tooliebell]

Then why wasn't the contract price reduced.  I didn't agree to give him the difference.    Why don't I get the extra?

[Tooliebell]

Here is how I thought it would work:

He has to pay 4800 in closing, if it wasn't that much the loan amount would be reduced by the difference in "real" closings costs.

[StartingOver10]

You would have had to have the price reduced through an addendum between the buyer and the seller. It might be a little late now because the seller is not allowed to give you the difference in the funds per FHA guidelines. If you had known earlier an addendum could have been made between the two of you and then the file would have to be resubmitted to your lender for approval by the underwriter. No, they can't apply the difference to your down payment.

Are you closing tomorrow?

[Tooliebell]

Yes, I am at 3.  I figured the lender would know recognize that the closing costs would be less than the amount in the contract and let me know. 

[StartingOver10]

No, the lender processes the contract as it is submitted. They don't review the costs EXCEPT in the GFE. Normally you would go over your costs in your GFE with your Realtor before making an offer so the costs are more tightly aligned. I always have the lender provide a copy of the GFE to me, with the buyer;s permission, so we can select as accurate a number as possible for the seller to contribute.

[Tooliebell]

The GFE I received showedd $4700.01 to be paid by seller.  At that time, everything looked okay on that front.

[StartingOver10]

I think it might be too late to change it because your closing package is probably already at the title co now. If you go back to change it with an addendum and going back through underwriting, as would be required, then you would have to pay an additional redraw fee (usually charged by the lender to redraw the package).

Also it would not happen in one day. You can ask your lender, your agent and the seller, but it really sounds like it would delay the closing until sometime next week.

[Tooliebell]

Chalk that $1600 up to a big mistake.  I am not going to ask for an addendum...this process has been too grueling to get here.  Thanks for your help StartingOver!