Is it legal for a lender to ask for more money after closing papers are signed?

Actually, the answer is yes. Yes, they can ask you for anything that was disclosed to you on the HUD you signed at closing. It has happened before that there has been an error in calculation and a simple mistake was made on the funds needed to close. If this is the case and you knew about it, but it was not asked for at closing, but caught before recording; you most certainly need to pay it. If however, they are tacking on a new fee that was never disclosed; then this is not allowed and is a RESPA violation. Check the HUD-1 you received at closing and see if the fee is there. If it is; you owe; If not, you don't.

No it is not. Are they living in the 1980's?

The answer give by GVDenny is 100% correct. Most likely an error was made at the closing and enough money was not collected. You can bet the lender is not trying to tack on a new fee but merely having you pay what has already been disclosed to you. Please check your initial disclosures and the HUD-1. I am sure the title company can explain where the $575 figure comes from. Hope this helps.