We closed on a house in PA in October 2003. Everything went smoothly (seemingly so). Five months later, the settlement company (a local law firm) called and said they found an error during their end-of-year accounting review.

Apparently, someone in their office had double counted an early $10k escrow deposit. We did get cash back at closing; apparently it was $10k too much.

The settlement company requested that we pay them back the $10k. After reviewing their records, I see how this mistake occurred; obviously, it is their fault. They admit as much.

I've been dragging this out for awhile (almost a year now), but I have this question for the forum.

Legally, do we need to repay this money, since the settlement company made the mistake and since it took several months for them to contact us?

I thought that the whole idea of a settlement company was to prevent problems like this.

Thanks for your feedback.

Yes of course you need to repay the money - it's not yours.

Yes.

If you check your closing documents, you most likely signed an agreement that you agreed to work with the closing company/ title company to resolve any errors.

Yes, you do owe the money.

And, if they have to file a Les Pendens to collect it will most likely cause you to pay legal cost and possible interest. It could also impact your credit significantly. In many states they can foreclose to collect the amount due after the Les Pendens.

I would strongly recommend you work with them and they may even agree to a discounted payment... if you have not already burned your bridges.

There are two questions you must ask yourself...

1. Do you feel right benefiting from someone's accident?

2. Do you feel good knowing you have in your possession $10,000 that is not yours? (form of stealing even though unintentional now that it has been brought to your attention.)

I agree with the previous posts. And I,too, suggest that you pay it off before it goes to collection agency and ruins your credit.

Keeping a good credit history is worth more than $10K.

You knew right from the get go that they had credited you too much at closing. Where was your integrity then? and now, for that matter, by posing that kind of question on line for all to see?

Tyring to make someone feel sorry for you now because you tried to get away with something and got caught. Forty lashes to you.

(Some people are just snakes)

Campion has harsh words, I sort of agree. There's a good chance that someone knew 10k too much was an error. I got a couple hundred dollars back at closing and was double-checking to make sure the numbers looked right.

It's not your agent or mortgage person's fault necessarily, but my mortgage people and I bring calculators to closing to help make sure all of the credits are correct. In review of your question, if you'd found out that they'd not credited you 10k, you'd probably be very upset and want what is rightfully yours.

The title companies in my area have the buyer and seller sign a statement concerning clerical errors. It basically says that if the title company realizes (after closing) an error was made, you will get an explanation of the error and you will honor it and pay any monies due (or get a credit for overages). Do you remember signing anything like that? Only fair to pay what is due... sorry, we can't side with you.

You should morally give back the money, as to whether it is legal, consult a lawyer. But I bet you will have to pay

I can't believe that they haven't slapped a lien against the property already. Especially after a year. They are treating you more than fair. As stated earlier, you probably did sign a clerical error statement. You are lucky they aren't asking for interest as well. If you keep dragging it out, you may end up in court and it will cost you a lot. Or quit being so cheap and pay for legal advice.

Be a citizen and do the right thing.

Tough crowd!

Guess you can't accuse us of not giving honest opinions...

It true, morally you should return the money. But, I don't blame you for having second thoughts. I bet you even the people that are badmouthing you, would find it difficult to give up 10k.

http://www.emortgagers.com/

I find it surprising that you didn't notice it right away and tell someone that there was a mistake. If I got $10k more than I was supposed to at a closing, I would have known it then and there and I would have said something. If they had kept an extra $10k of your money, you would have known it right away, right?

You're screwing around with a law firm for $10k? In my book, that ranks right up there with playing with matches at a gasoline pump. Everybody's going to get burned, eventually.

The law firm will look inept, because they can't keep track of 10k, you will look like a crook because you're holding onto money that's not yours... Nobody is going to come out unsinged, and after a year, I imagine some bad blood has crept up between you and this firm. It's a matter of saving face at this point, isn't it?

If you don't have a good reason to keep the money, (Like it wasn't in the contract) then settle with the firm ASAP, if for no other reason than to maintain your reputation, a reputation that would probably be damaged by a lawsuit and bad press if you let the lawyers take it to court. (Sorry, I recently had a rather, shall we say "Eye Opening" experience with lawyers... I'm not impressed... You can read about it on my blog. http://rivalarrival.dyndns.org

I just wanted to mention a little experience I had with overpayment. Seems I didn't file my taxes properly in 2003, and was entitled to $412 more than I had claimed. !!UNCLE SAM!! found the mistake and cut me a check. I couldn't believe it.

Good luck, and I hope I didn't offend you. That was NOT my intention.