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Seasons, Home Buyer in Fremont, CA

Bank not sending docs to title

Asked by Seasons, Fremont, CA Mon Aug 29, 2011

I have a loan that is approved by a bank and they have been delaying the loan docs for now a week. It is very hard to reach them even though they are local. Last they told me is that the loan needs to be reapplied as they have a new banking software that accidently closed the loan. I was promised loan docs will be in title today but again they are not. I am now today out of contract. is there any recourse on this with the bank?

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You could report them to whoever they are held accountable to but it's unlikely you would get any benefit out of it, and it wouldn't be anytime soon (certainly wouldn't help you out in your current situation). However what they did is inexcusable - essentially what they did is close your loan, and for compliance purposes, they needed to essentially have you reapply and wait all of the minimum required waiting periods before you could legally close on your loan, and that'll be approximately a week.

What I feel your lender needs to do is call up your real estaet agent, as well as the listing agent, and explain exactly what went on and own up to their mistake, saying it was completely their fault and you had no hand in what happened at all. They should also have an exact timeline on when each item would occur, from the closing instructions/loan documents getting to the escrow/title company to the loan documents would be signed to when the loan would be funded to when the loan would be recorded... so everyone knows how much more time to request for the extension.
1 vote Thank Flag Link Mon Aug 29, 2011
There is generally no recourse. You may want to have your Realtor speak with the selling agent to see if there is a lender they trust who is fast and start from scratch. Many lenders can close in 12 days and less. You should also contact the branch manager for where your loan "is" being handled and ask about the situation. If that is in fact what happened they should be able to give you hard dates as to when the new loan docs will go to title. You want to make sure mangement is involved. The last thing you want is someone trying to cover their mistake at your expense. Closing out your loan while it is in process is nothing I have ever heard before but I guess it could happen. If it was an FHA loan and they denied it and that is what happened you could have bigger problems depending on how it was coded.
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0 votes Thank Flag Link Mon Aug 29, 2011
*ProQvest and Amy Insook Lee believe the comments below is for informational purpose only but has not verified this information and assumes no legal responsibility for its accuracy. Whoever needs this information should investigate these issues to their own satisfaction. If you do agree, please read my comments below".

Have you received an loan approval letter from the loan company after appraisal was done? I believe you did. Otherwise, you wouldn't remove the loan contingencies because it's very risky removing loan contingencies without any proof. In RE transaction, verbal commitment doesn't really help much. I believe the letter should help you to talk to the supervisor to convince that they should find a way to make this work since it doesn't seem it's your fault. If you talk to the supervisor with the proof of the loan approval letter, I believe they should help the situation. And then, talk to your realtor what they are saying. Hope your realtor can give you advise.


0 votes Thank Flag Link Mon Aug 29, 2011
That is unfortunate. Sorry, to hear that you're getting lackluster client service from your current lender. I would highly advise getting in touch with a local mortgage broker/banker who can close the loan quickly. Also, hopefully your Realtor has a fully executed purchase contract addendum in place today to extend the close of escrow. Otherwise, your earnest money deposit is in danger of being taken by the seller.
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0 votes Thank Flag Link Mon Aug 29, 2011
Frankly, I do not believe "the story" you were given that a software glitch "closed" your loan package. Who told you that: a bank rep or a mortgage broker? If "the story" is true, then simply ask seller for a week's extension of closing date.

Incidentally, why are you nvolved with the loan package at this staqe of the process? Why aren't your agent and the escrow officer coordinating the arrival of loan docs?

Leopold Rodriguez
0 votes Thank Flag Link Mon Aug 29, 2011
There is no realistic recourse that you can do. I would have your agent call the loan agent and get the supervisors number. Give him/her a call and rattle some cages. I would then give that number to the sellers agent so they can call. This may or may not rush things but it will create an "us against them" mentality and the sellers will know you are doing all you can and that you are all on the same side.

Make sure your agent is sending emails that get to the sellers as well as the sellers agent. Communication can alleviate a lot of fear of the unknown. Also, Get a letter from the loan agent for the sellers stating the loan is approved but there is a software issue and when you do the extension of time, give yourself a few extra days so you’re not just doing another one.

Remember, you are not out of contract if the sellers agent has not given you a "Notice TO Perform" and they have to give you 48 hours to perform.

Best Regards,

Eric Soderlund
0 votes Thank Flag Link Mon Aug 29, 2011
Hi Seasons-

Is this a direct lender? Did your agent refer you to them or is this your bank where you have your checking/savings account? You're best bet is to try and reach a supervisor and go up the chain of command until your docs get out. Your agent should be involved in this with you, most certainly. Keep your lines of communication open with the listing agent too. No listing agent likes surprises at the very end.

Good luck.

Rich Bennett, Realtor

Zephyr Real Estate
0 votes Thank Flag Link Mon Aug 29, 2011
Probably not. Banks are fairly bullet-proof. They have language that gives them an out until the last second. If you re-apply fast (and already have an acceptable appraisal) maybe the seller will extend and the lender will expedite the paperwork.
0 votes Thank Flag Link Mon Aug 29, 2011
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