We are buyer on SS - received verbal notice (email) of approval on Monday from 3rd Party Negotiator that Fannie Mae had approved with a "counter".  They did not counter the purchase price but lowered closing cost assistance from 3% to 1.25%, and FM only approved $1,000 of the $5,128 negotiator fee.  So now they are passing that $4,128 difference on to us the buyers as a closing cost. 

2 months after signing the purchase agreement we were presented with documentation regarding 3rd party firm (that Seller/Seller Agent hired) - another story entirely.  But we questioned their fees then and were told and signed document to the effect that this fee was to be paid by the lender.  However now that lender lowered closing cost credit, we are being stuck with the fee - an additional $4128 added to what we have to bring to table in addition to OUR lender's closing costs.  Can they (the negotiator) do this?? 

The actual document we signed (after being assured by agent that the fee would be paid by lender) states the following: 

(for Michigan, Ohio, Indiana, Wisconsin) - Legal fee paid at closing by the Lender. 

Buyer's closing cost, offset by a concession to the buyer at closing.  We suggest adding a 3% closing cost concession to the contract, if not already present to cover any closing costs the lender does not.

We are not willing to walk over the $4000 but feel like we are just being taken advantage of at this point by the Negotiator and so far the realtors are zero help (they are unwilling to even discuss negotiating ANYTHING).   When I asked the agent why we were being stuck with the fee after he told us it would be paid by lender, he said "well FM is driving the bus now and that's your government at work" 

Sorry for the rant!