Home Buying in Sacramento>Question Details

Jenny, Home Buyer in Sacramento, CA

Bank owner holding up escrow closing. What is my recourse as a buyer?

Asked by Jenny, Sacramento, CA Thu Apr 3, 2008

I'm in the process of buying a bank owned home in Sacramento, CA. We signed our docs last week and we were supposed to close on 3/28. A week later, we still haven't closed because the bank that owns the home has not provided the signed deed and a HUD form. We started all the utilities at the new house on 3/28 in preperation for taking ownership and my home owners insurance started 4/1. In addition, we've had to pay 2 weeks of rent (unil April 14) to our current landlords who have been kind enough to let us stay after we terminated our rental agreement, but our mortgage due date remains 5/1. If we had held up the closing, we'd be paying the bank $100 per day, but they don't have to give us anything. At this point, can we get any financial relief from them? Can we even walk away at this point?

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Hi Jenny,

You are not alone in your frustration, this is very common. I prepare my clients for this experience.

In the last transaction I did with a bank owned home our documents were expired when we finally closed. We signed our documents on the 24th of the month with a contract lose date of the 31st but, didn't close till the 11th of the following month. Because we were waiting for the exact same documents you are now. I called the title company everyday placing pressure on them to put pressure on the bank. Your financing bank places a date of expiration on your documents. In your case you have "March documents" and your first payment will start May 1st. Most banks really only want to honor your documents for 7 days into the following month of the docs. They don't want you to move in and have your first payment due in just 2 weeks. But, this is exactly what can happen if this drags on another week. My lender was also calling the funding bank begging them to allow this transaction to close even though our documents had expired a week earlier. The buyer wanted in this house no matter when their payment was going to start.

Now that you know you are not alone, the answer to your question is NO, there really is no recourse. I was threatening the title company that somebody was going to pay for re-drawing of documents if our bank would not let us fund on the expired docs. In our case, the bank owned home had us sign their contract which clearly stated that if they (the seller) could not meet a time frame they automatically had a 2 week extension. Their contract protected them from any wrong doing. We finally closed and all was well...but the stress level was VERY HIGH. I spent many days with high blood pressure trying to make people do their jobs!
0 votes Thank Flag Link Thu Apr 3, 2008
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