Real Estate/Mortgage Loan Question
03-25-2008, 05:34 PM
#1
Safety Car
Thread Starter
Real Estate/Mortgage Loan Question
The wife and I are trying to buy a house. We went through a mortgage broker. Citibank is giving us a loan, but we have missed the denial deadline, and we may miss the settlement date on the contract. If so, we lose our earnest money to the seller. The loan took so long because Citi wanted our full financial info from last year, pay stubs and our first born, and it took them a week for them to decide to ask for it.
What I want to know is whose ass do I get that earnest money back from if I can, and can I go for a little more, since I have a pull on my credit that resulted in no loan, thus hurting our score. This is of course if we miss our settlement deadline. We will not get an extension, since the seller missed our closing cost clause in the contract when she signed it, and was pretty pissed about it.
Cliffs:
Who do I go after for earnest money if my lender dropped the ball?
What I want to know is whose ass do I get that earnest money back from if I can, and can I go for a little more, since I have a pull on my credit that resulted in no loan, thus hurting our score. This is of course if we miss our settlement deadline. We will not get an extension, since the seller missed our closing cost clause in the contract when she signed it, and was pretty pissed about it.
Cliffs:
Who do I go after for earnest money if my lender dropped the ball?
03-25-2008, 05:44 PM
#2
it's me, Alan Rickman.
Isn't the earnest money deposited by you?
You can go after yourself or the bank I guess?
I am looking for a house right now as well; it's my first home so I was going to do 3% first time buyer assistance and 97% financing - well my lender calculated my stuff for the wrong county, the income cap for assistance where I work is higher than where I live and where the home would be, by about $18k, so i'm no longer eligible for the first time buyer program.
Same thing for the loan itself; if I made $8 an hour and had horrible credit my APR would be 5.7%, but since I have good credit and make decent money my rate is 6.5% because i'm above the median income range.
bunch of bs.
good luck
You can go after yourself or the bank I guess?
I am looking for a house right now as well; it's my first home so I was going to do 3% first time buyer assistance and 97% financing - well my lender calculated my stuff for the wrong county, the income cap for assistance where I work is higher than where I live and where the home would be, by about $18k, so i'm no longer eligible for the first time buyer program.
Same thing for the loan itself; if I made $8 an hour and had horrible credit my APR would be 5.7%, but since I have good credit and make decent money my rate is 6.5% because i'm above the median income range.
bunch of bs.
good luck
03-25-2008, 09:47 PM
#3
Stage 1 Audi S5
It will be very hard to get your money back if you miss settlement so you gotta beat up your broker. Since you know the lender you can try and contact the underwriter and explain what is going on and that your broker sucks (citi knows what they need and are quick on turn around and it USUALLY not always is the broker that didnt submit what they should have on time). The bank def. wants to close the loan if you have good credit and the broker doesnt get paid if the loan doesnt close so he will do his best to close it. Again i would beat up the broker and make him drop atleast a half a point for the trouble. Oh im a broker for the record
03-26-2008, 12:45 AM
#4
05/5AT/Navi/ABP/Quartz
Read the purchase contract that you signed. It will spell out contingencies under which the deposit must be returned. In CA an escrow company would have the funds. They will not release them unless both parties agree.
Might not be anyone to 'beat up' except yourself. Did you agree to terms you didn't understand? Lots of time the period to comply with conditions like loan approval and closing dates can be negotiated when the contract is written. Better to push it out a few weeks and get everything done on time.
The entire home lending industry is drowning in red ink right now. They are reluctant to make any loans even to people with good credit. Everything is taking longer than it should. In addition, loan programs are changing daily as are interest rates until they are locked.
It is standard proceedue to require lots of documentation of your personal finances for all real estate loans. Underwriters question everything they don't think looks right. Nothing you can do about that.
Last, your credit will not take a seperate hit if you end of getting a mortgage within about 90 days I think. All of the related inquiries are treated as one. Good luck on getting the transaction completed.
How much money could this possible lesson cost you?
Might not be anyone to 'beat up' except yourself. Did you agree to terms you didn't understand? Lots of time the period to comply with conditions like loan approval and closing dates can be negotiated when the contract is written. Better to push it out a few weeks and get everything done on time.
The entire home lending industry is drowning in red ink right now. They are reluctant to make any loans even to people with good credit. Everything is taking longer than it should. In addition, loan programs are changing daily as are interest rates until they are locked.
It is standard proceedue to require lots of documentation of your personal finances for all real estate loans. Underwriters question everything they don't think looks right. Nothing you can do about that.
Last, your credit will not take a seperate hit if you end of getting a mortgage within about 90 days I think. All of the related inquiries are treated as one. Good luck on getting the transaction completed.
How much money could this possible lesson cost you?
03-26-2008, 10:06 AM
#5
Safety Car
Thread Starter
Bout 1k and yes the earnest is in escrow. We were told by the broker that our loan would take about 2 weeks. Our contract gave us a month to get the loan settled. We figured that should not have been a problem.
What killed us was Citi's second round of requests, they wanted to know where our 20% came from...had to prove that I sold a car to get to that 20%, which was a pain in the ass.
We may close today, and our deadline is Friday, so we may make it, but only after lighting lots of fires under people.
Citi also sent a request yesterday for the same documents I had already submitted, so some jackass didn't pass things off to the underwriter.
What killed us was Citi's second round of requests, they wanted to know where our 20% came from...had to prove that I sold a car to get to that 20%, which was a pain in the ass.
We may close today, and our deadline is Friday, so we may make it, but only after lighting lots of fires under people.
Citi also sent a request yesterday for the same documents I had already submitted, so some jackass didn't pass things off to the underwriter.
03-26-2008, 10:15 AM
#6
Just dial 1911
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You really should have pre-approved yourself before you even opened escrow. Most of the finnancial info would have been finished prior to. I'm suprised your broker didnt suggest this...
I'm pretty sure you can ask the sellers to extend the escrow to 45 days instead of 30. If you're this deep into the escrow, I doubt the sellers would want it to fall through just because the loan may be funded a few days late...
I'm pretty sure you can ask the sellers to extend the escrow to 45 days instead of 30. If you're this deep into the escrow, I doubt the sellers would want it to fall through just because the loan may be funded a few days late...
03-26-2008, 02:56 PM
#7
Racer
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As long as you still want to buy the house and there isn't a backup offer or anything, the sellers will agree to push back settlement for a couple days. No biggie.
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03-26-2008, 10:38 PM
#8
05/5AT/Navi/ABP/Quartz
Sorry if I sounded a little harsh. Looks like it wasnt your fault just your money at risk. The others are correct, if you don't get it closed an extension shouldn't be difficult. It's not like prices are going up or there were multiple offers. Hope it gets closed, let us know. 
Originally Posted by Gilgamesh
Bout 1k and yes the earnest is in escrow. We were told by the broker that our loan would take about 2 weeks. Our contract gave us a month to get the loan settled. We figured that should not have been a problem.
What killed us was Citi's second round of requests, they wanted to know where our 20% came from...had to prove that I sold a car to get to that 20%, which was a pain in the ass.
We may close today, and our deadline is Friday, so we may make it, but only after lighting lots of fires under people.
Citi also sent a request yesterday for the same documents I had already submitted, so some jackass didn't pass things off to the underwriter.
What killed us was Citi's second round of requests, they wanted to know where our 20% came from...had to prove that I sold a car to get to that 20%, which was a pain in the ass.
We may close today, and our deadline is Friday, so we may make it, but only after lighting lots of fires under people.
Citi also sent a request yesterday for the same documents I had already submitted, so some jackass didn't pass things off to the underwriter.
03-27-2008, 08:20 AM
#9
Suzuka Master
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I had a similar situation, although under a different scenario and if things fell through, I actually had a case to go after the lender (Chase home finance).
I bought a house at auction over a year ago, $10k deposited and a month to get financing. With my credit and income, it should have been no problem. Met with lender, they pulled my credit and assetts and income and said it would be no problem and I would be approved in 2 weeks at latest. After speaking with him a week later, he told me to schedule closing with my lawyer for the following week.
During the following week, I met with my lawyer and on conference call with the lender, the lender said I was approved and things can be set. Between that time and closing, lender called me asking me for receipts for improvements i had made on a 9-unit rental I own. I told him it would take a while for me to gather all receipts, but he said it was necessary for me to be approved. I told him that he informed me AND my lawyer that we were already approved, and he said "no, you are only 'pre-approved'". That was complete bullshit because my lawyer and I heard him loud and clear on the conference call earlier.
Anyway, I gather my receipts and drop them off at his office and he said closing was still a go. I show up for closing, and lawyer looks at me funny. He was told (by lender) that the lender informed me I was not approved yet because they were questioning my tax returns for the past 3 years and comparing them to my receipts. I told him I was never informed, and last communication I had (less than a week earlier) that the lender said closing was a go. So again, we are on conference call and my lawyer rips the agent a new one, first for saying I was approved, later saying I was only "pre-approved", then saying that closing is still on, then not informing me that I was not approved at all. I had $10k in on this with no contingencies (last time I do that!) and the lender's agent is playing games.
The seller is pissed, but gives me another week after the deadline to close. After no more communication with the lender, he calls me up and tells me I'm approved. Turns out they READ MY TAX RETURNS WRONG, which is why it was so delayed and the agent kept insisting I have more receipts for my rental improvements when I didn't. After costs every year, if I come out with $10k in my pocket from my rental property, I still depreciate the building and come out with a loss on my taxes. So for example if I net $10k and depreciate the building at $17, I have a loss of $7k even though I had positive cash flow. The lender was trying to figure out why I had the loss and was telling me I had "receipts" that he needs to confirm this loss, when in fact he forgot to look at the depreciation which would have added up in his calcs. In the end, what happened was someone else reviewed it and caught the first guy's mistake, which is why they approved me.
But according to my lawyer, due to the lending agent's inaccurate statements of first being "approved", then later being "pre-approved", then later not communicating to me that I was not approved at all, then finding out that THEY were at fault for the delay for misreading my tax retunrs, I had a good case to recover my $10k from them if the seller walked away with it.
I bought a house at auction over a year ago, $10k deposited and a month to get financing. With my credit and income, it should have been no problem. Met with lender, they pulled my credit and assetts and income and said it would be no problem and I would be approved in 2 weeks at latest. After speaking with him a week later, he told me to schedule closing with my lawyer for the following week.
During the following week, I met with my lawyer and on conference call with the lender, the lender said I was approved and things can be set. Between that time and closing, lender called me asking me for receipts for improvements i had made on a 9-unit rental I own. I told him it would take a while for me to gather all receipts, but he said it was necessary for me to be approved. I told him that he informed me AND my lawyer that we were already approved, and he said "no, you are only 'pre-approved'". That was complete bullshit because my lawyer and I heard him loud and clear on the conference call earlier.
Anyway, I gather my receipts and drop them off at his office and he said closing was still a go. I show up for closing, and lawyer looks at me funny. He was told (by lender) that the lender informed me I was not approved yet because they were questioning my tax returns for the past 3 years and comparing them to my receipts. I told him I was never informed, and last communication I had (less than a week earlier) that the lender said closing was a go. So again, we are on conference call and my lawyer rips the agent a new one, first for saying I was approved, later saying I was only "pre-approved", then saying that closing is still on, then not informing me that I was not approved at all. I had $10k in on this with no contingencies (last time I do that!) and the lender's agent is playing games.
The seller is pissed, but gives me another week after the deadline to close. After no more communication with the lender, he calls me up and tells me I'm approved. Turns out they READ MY TAX RETURNS WRONG, which is why it was so delayed and the agent kept insisting I have more receipts for my rental improvements when I didn't. After costs every year, if I come out with $10k in my pocket from my rental property, I still depreciate the building and come out with a loss on my taxes. So for example if I net $10k and depreciate the building at $17, I have a loss of $7k even though I had positive cash flow. The lender was trying to figure out why I had the loss and was telling me I had "receipts" that he needs to confirm this loss, when in fact he forgot to look at the depreciation which would have added up in his calcs. In the end, what happened was someone else reviewed it and caught the first guy's mistake, which is why they approved me.
But according to my lawyer, due to the lending agent's inaccurate statements of first being "approved", then later being "pre-approved", then later not communicating to me that I was not approved at all, then finding out that THEY were at fault for the delay for misreading my tax retunrs, I had a good case to recover my $10k from them if the seller walked away with it.
03-27-2008, 09:48 AM
#10
Safety Car
Thread Starter
Well, we closed yesterday. We did get preapproved by the broker, and it WAS going to be stated income. Then Citi changed their minds and wanted a full doc.
We would not have gotten an extension. When the seller went to close on the 21st, the numbers were off. The seller and their agent MISSED our 3% closing cost request when they signed. Then they called my agent and called him a dirty lying SOB cheat...etc. Funny stuff, cause if the shoe was on the other foot, I'd be pissed at my agent, not the other one. For the record, that clause was in the standard spot left blank for other conditions, and it was even underlined Would anyone miss that on a 2.5 page Purchase Contract? Not me...
They said they will close tomorrow (3/28) so we are hoping they will...want to avoid court here. That said, if they don't at this point, we are done and funded, so they can try to get out and we will sue to perform the contract...tying up the house until a judge can hear the case. I'm sure they don't want that.
We would not have gotten an extension. When the seller went to close on the 21st, the numbers were off. The seller and their agent MISSED our 3% closing cost request when they signed. Then they called my agent and called him a dirty lying SOB cheat...etc. Funny stuff, cause if the shoe was on the other foot, I'd be pissed at my agent, not the other one. For the record, that clause was in the standard spot left blank for other conditions, and it was even underlined Would anyone miss that on a 2.5 page Purchase Contract? Not me...
They said they will close tomorrow (3/28) so we are hoping they will...want to avoid court here. That said, if they don't at this point, we are done and funded, so they can try to get out and we will sue to perform the contract...tying up the house until a judge can hear the case. I'm sure they don't want that.
Last edited by Gilgamesh; 03-27-2008 at 09:52 AM.
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