We are under contract to sell our home. Buyers pushed to close as soon as we could possibly arrange, which date turns out to be tomorrow. As of this minute, their lender still has not approved their mortgage, nor given our attorney a “clear to close.”
Their mortgage contingency period was supposed to expire last Monday. They asked for a 1-day extension, and we granted it. Then they asked for an extension until this past Friday. We eventually granted that one, because we had heard no indications that they weren’t going to get approval, just that the lender was taking too long. Friday afternoon they asked for an extension until this afternoon, which we granted only on the condition that closing gets pushed back a day to this Wednesday.
If this doesn’t go through, this will not be a problem for us. We have a second home in Florida, which is where we were headed anyway. It’ll be annoying as all hell, but that’s about all. Apparently, the Buyers are nearing the end of the lease on their current place, so they’re the ones who need a place to live. We’ll put the home on the market, and it’ll probably sell pretty quickly based on the comps in this neighborhood.
It’s just really frustrating. I’m going through the normal mood swings of a big move, where one minute I look around and think there’s not that much left to do, and the next minute I think, “WE WILL NEVER BE DONE IN TIME!!” I’d rather not expend that much mental energy for nothing.
Yeah, our attorney talked me down today. Apparently, the lender is just taking his or her sweet old time in getting everything done. He said he was 95% sure it’ll all work out, and that of late if you close anywhere within 5 days of the closing date spelled out in the contract, you’re doing fine.
Probably not, if there’s still a financing contingency. The seller only keeps the earnest money if the buyer walks away without a good reason, if I understand things correctly.
Lenders dragging their feet on mortgages is nothing new, unfortunately. Since the fallout last decade, they’ve gotten extremely particular about things, including demanding new paperwork they’d never asked for before, etc. Our own tale of woe last year was, I fear, par for the course.
What lender is this (if you can disclose)? One of the Big Guns such as Wells Fargo, Shitibank, BofA and so on?
You’re already past the latest contingency / closing date at this point: has anything moved one way or another?
If I were you, I’d go ahead and relist. If you get another buyer without contingencies, you have the leverage to tell the current buyers that they are out of luck. If they’re truly that close, they’ll be ready to close before you find another buyer; if they’re NOT truly that close, you’ll be better off finding a new buyer.
Well shit. About 6 years ago everybody was bitching about the banks freely lending money to anyone to buy a house, which was a leading contributor to the resulting financial crisis.
Now that they are being a bit more rigid in their underwriting, your house may take a bit longer to sale, but at least residential mortgages will be less of a contributor to the next financial pop.
Yo! I process consumer mortgages at a moderately-sized multi-regional bank. We are backed up like you wouldn’t believe. Summertime is always our busiest season. Adding to that, interest rates are historically low. There are also a number of new first-time homebuyer & rehab home loan programs at the state level that make this a great time to purchase a home. Our pipeline is the biggest it’s been since the housing crash.
In our defense, a lot of the purchase contracts coming across my desk are incredibly unrealistic. Often, the buyers took weeks to apply for financing and try to make their emergency our emergency. But it doesn’t work that way… fair lending regs give us 30 days from the final application date to make a credit decision (meaning either commitment or suspension of the file by an underwriter). That’s not 30 days from walking in the door and talking to a loan officer about a pre-qual, either–it’s 30 days from the time you get pre-approved, sign all the disclosures, and provide your paystubs/bank statements/tax returns/etc. During those 30 days, we will be waiting around 2 weeks for most appraisals to come back (it’s their busy season too). Frankly, anyone expecting to go from application to commitment in under a month is living a pipe dream.
I’m not saying we don’t do what we can to accommodate. We do, and way better than larger banks. But when you’re working 10+ hour days and nearly every single file is past one contingency date or another, and the borrower wasn’t willing to pay the appraisal rush fee, welp… sorry, but you’re standing in line with 50 other borrowers who applied in the same week you did. There’s only so much we can do.
Still waiting. No idea who the lender is, but our attorney spoke to them yesterday, and they assured him they would be finished today or tomorrow, so we’re looking at probably a Monday or Tuesday closing. We’re headed out of the country today, so I basically just have to wait for an e-mail from our attorney, or to see the proceeds hit our bank account.
Aside from just the general frustration at the delays, it’s really not that big a deal for us. We’re not homeless, and we didn’t even have the place on the market, so there’s no history of listing/de-listing/whatever. I told the others in our building that we were going to put our home on the market, and one of of our neighbors said she had a friend who was interested. If it falls through, we put it on the market, and I suspect it sells pretty quickly.
Buyers have to be freaking out a little bit, because (if I remember correctly) their lease ends sometime very soon, with pretty heavy penalties for overstaying.
You could always offer to let them rent your home from you before you close (a pre-closing occupancy agreement). This way, you get some money for being patient, they aren’t homeless, and the pressure of the closing deadline (plus the need to constantly beg for more time) dissipates.
Of course, if you do this, then they have to expressly waive all contingencies with regard to the condition of the property (you don’t want them moving in and then finding things “wrong” with the house). And there is the risk that their loan falls through, and you are dealing with an eviction.
That’s kind of what happened to us, except I had proactively asked if there was anything else they might need later in the process when we submitted our initial application, so we could gather it ahead of time. They assured me there wasn’t. Well, of course then we were given one business day’s notice to collect two years of basically every financial document known to mankind: bank and credit card statements, utility bills, etc. because Tom Scud had spent most of the previous ten-year period living outside the U.S., so they decided he didn’t have sufficient credit history (which we’d mentioned in the beginning, mind you).
Then we were told that we couldn’t close on a particular Monday because it was Presidents Day and the banks wouldn’t be open. So I was pestering the lender the whole previous week to give me the amount of the certified check that I had to bring to closing, and couldn’t get her on the phone. Finally at the end of the day Friday, she told me that I could just get it Monday. Umm, nope, Monday is a bank holiday, which is why we are doing the closing first thing Tuesday morning, you moron! If you’d actually read my e-mail, you would know that. Then she decided not to bother getting the title company the numbers they needed to prep the closing docs until we’d all been sitting at the table at the closing for an hour. Our attorney wanted to kill her.
(And this was February, not exactly peak season for home sales. She was just a moron. We did a refi three years ago, and it was smooth as silk.)
Most of that isn’t the problem of the consumer. Can’t provide timely service - staff to provide timely service. Processors working ten hour days, staff so you aren’t exceeding the capacity of your people. Can’t work appraisals in a timely fashion without passing along a rush fee, staff more appraisers.
There is nothing like giving a company two months to close, be prompt in providing all the documents,only to be told you need to pay a rush fee on the appraisal and then show up at closing and have everything postponed for three days because the mortgage company still didn’t have its act together.
I went down this same road getting a loan for an addition.
We need these twelve or so documents, none more than a week old. My wife’s pension statements are only issued once a year, in January. My 401k statements are only quarterly. Our paychecks are biweekly, but on alternating weeks. The laws of physics prevent this from working, folks. So you’re saying we can only get the loan if it’s from January 3rd through 5th, since that’s the only period these all line up?
We went through a different bank. Still painful, but ultimately successful.
I don’t work for Quicken loans, and I don’t stand to make a nickel of them, but I started the loan process with them on May 15, 2014 and I closed on June 5, 2014. Everything was handled by email and telephone except for the closing. For that they sent a notary and a witness to my house on an evening after work when it was convenient for me.
I’ve gotten six mortgages over the last 40 years and it was by far the least burdensome. The best rate too, 2.875% fixed.
It seems to me that if you can’t process the mortgage in a timely matter that you should either staff up, refuse to take any more applications, or at least tell the loan applicant that you can’t finish before X number of weeks pass.
It’s interesting when you realize that you can process a loan for a $60,000 car within a few days but a loan for a $60,000 house takes over 6 weeks.
To be fair, there are a LOT more ramifications with a real estate purchase than with a car. Cars usually have fairly substantial audit trails as far as ownership (especially a new car). Property has tax issues, lien issues, easement issues (see another current thread re undisclosed easement), etc.