What is the penalty in Texas for going over 80% of home valu

tllucky13 · Joined: 27 Nov 2007 Posts: 1 1.39 Dollars($)

My home is appraised at 179,000 and I got a loan for 159,000 and I was told they should have only gone to 80% 143,200.00
Is there a penalty for the mortgage company

jenkin7 · Joined: 04 Jun 2007 Posts: 880 131.00 Dollars($)

Hello Tllucky,

Is this a first mortgage or a refinance?

In case of a primary mortgage you can have the loan amount more than 80% of the appraised value but you have to pay mortgage insurance if your down payment is less than 20%.

But in case of a cash out refinance, you can only get up to 80% loan to value according to the state laws.

Guest 0.10 Dollars($)

Thank you for the answer so quickly.
I did a cash out refinance and they went over the 80%.
Is there a penalty to the mortgage company?

evolovik26 · Posted: Wed Nov 28, 2007 8:37 am Post subject:

what do you mean by penalty?
There might be adjustment to the rate that they can give you but there is no penalty.

ckalvesmaki · Posted: Tue Dec 04, 2007 6:08 am Post subject:

If the house is a primary residence then it would be a violation of the TX a6 laws........however I think you may not have accurate information on your value.....Do you have a copy of the appraisal and are you looking at the correct line for the value......there are 2 different values on an appraisal......the first and lower of the 2 numbers is your cost to rebuild........the second further down in the report is the actual value........Loan docs are drawn via 2 attorneys in TX....one for the lender and the second for the title company.......it is highly unlikely that a lender would make this kind of mistake.....however if you feel that a mistake was made you need to go to the Texas dept of banking and file a complaint. There are reprecussions for violating this law.......however.......and there is always a however........it also depends on the type of lender who did your loan.........if your loan was written via a federally chartered bank they may choose to ignore the state guidelines as the state can't regulate a federal institution.......just my .02....or are you looking at your county tx assessment......

lisascherzer · Joined: 04 Jan 2008 Posts: 575 66.11 Dollars($)

The 80% rule applies only to a cash out transaction. If you recieved more than $2000 or paid off debts other than the mortgage, then It seems that the mortgage company broke the law. If it was a cash out transaction then I suppose you can report them to the governing agencies but I'm not sure what you could do otherwise.

lisascherzer · Joined: 04 Jan 2008 Posts: 575 66.11 Dollars($)

I just noticed a post the clarified that it was a cash out transaction. In this case, if you contact the department that governs mortgage companies in Texas (usually department of finance) then that agency will take appropriate action which could involve penalties.

ckalvesmaki · Posted: Wed Jan 09, 2008 5:57 pm Post subject:

Lisa,

On a TX refi transaction with no cash out the normal $2000 dollar rule doesn't apply...The ONLY cash a borrower may get at closing is a refund of pre-paid items ie appraisal.

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