Jerri, Real Estate Pro in Hawthorn Woods, IL

I bought a home with Toll Brothers in Feb 2007, applied for a mtg. with TBI in March 2007, got my good faith

Asked by Jerri, Hawthorn Woods, IL Fri Jan 9, 2009

estimate in April 07, began construction of my new home in Hawthorn Woods, IL in June 07, rcvd.,notice at the end of Nov. that their in house lender, TBI, no longer could provide a mtg for us with 45 days left until our home was complete. They currently hold $247K, in dep. money. I lost a cash offer in Dec. 07 on my current home because we had no mtg at the time. It took until April 08 to secure another super jumbo loan, however due to the recent housing marke,t we were unable to sell our home. TB is currently holding all of our deposit money, made my broker pay back the commission I received on the property as a Realtor, and is demanding an addt'll 52K on a promissory note for default. TBI is accepting no responsibility whatsoever for not fulfilling their mtg commitment. We have hired an attorney. We have offered to purchase the house at the current MLS price of 1.5K, but they will only accept 1.86K, our old contract price. No lender would appraise house for that price. Help!

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6
I would love to hear a "bring down" on this story. What happened in the end?
0 votes Thank Flag Link Sun Apr 22, 2012
Sounds like there was more to this story. How was your credit ?? Is that why you lost your mortgage approval? Usually this happens because people start buying and it seriously affects the credit. The lender runs credit 45 days out before close for this reason. Did it possibly slip from a higher rating while building process was going on? Why didn't you sell to the cash buyer and stay in temporary housing? It sounds like you were more the issue than the builder
0 votes Thank Flag Link Thu Sep 23, 2010
It would seem to me that you should be able to get your 247k back if you couldn't get the loan... though everything depends on the specifics of your contract of course...If your attny doesn't work out for you - I know of several that are very good that get results fairly quickly that I could always pass along to you...

I'd get your EM money back & then kill the first contract. Hopefully - your initial contract wasn't so screwed up
that TB had a right to keep the EM even if their in-house lender denied funding - for whatever reason.

Then - make an offer for 900k (as I assume you meant 1.5 million list before) :-)
0 votes Thank Flag Link Sun Nov 29, 2009
That kills my thought, then. It may not have applied in your case due to the loan size.

The issue I had in mind relates to C-to-P loans when it's time to convert to permanent - secondary market typically requires a warrant form the lender stating that the value hasn't dropped since originating the loan. Many folks have been stranded by that little issue since the market tanked, and the lenders don't divulge the problem; instead they try to beat a huge cash infusion out of the buyer to make up the difference.

Unfortunately, outside the lending realm I'm not qualified to offer suggestions. It sounds like much will depend on your contracts with Toll Bros and if your attorney is able to link the purchase contract with the mortgage commitment. Partial performance and consideration might be the keys to conditioning one promise upon the other.

Knowing builders, I'll bet your attorney finds a way. Buildersof all sizes seem to be sloppy in keeping a clear separation of relationship between the sales and mortgage divisions.

Good luck to you. And keep us posted.
0 votes Thank Flag Link Fri Jan 9, 2009
It was built on TB's dime. They currently have the home listed as a spec. home in the local MLS.
0 votes Thank Flag Link Fri Jan 9, 2009
Lending question

Did Toll Bros Mortgage provide your with a construction-to-permanent loan, or are they building the home on their dime?
0 votes Thank Flag Link Fri Jan 9, 2009
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