Home Buying in 77077>Question Details

Thirdy, Home Buyer in 21234

Our mortgage lender told us we can't close today since the papers on their end are not ready yet. Any consequences if we refuse to sign?

Asked by Thirdy, 21234 Wed Dec 22, 2010

extension? Lender is not ready with settlement papers. Today is supposedly the settlement date. They said it could be ready by tomorrow. This is the 3rd time to happen and we're tired of it. We are planning to back out. Is there any legal implications if we don't sign the contract extension request? Is the contract null and void after today? Can we be sued for backing out this late?

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This is a very common occurrence for real estate transactions where there is financing involved. Lenders in an attempt to meet transaction deadlines often times fall short for a variety of reasons. I tend to agree with everyone else in this tread that the extent of recourse and liability on your part for walking away from the transaction really boils down to the sales agreement and what was mutually agreed upon. Ultimately, if you decide to walk away the seller can be satisfied with your forefeiture of earnest money. If they are not satisfied with the earnest money and want to enforece the contract there may be a specific performance issue. You'd have to consult with an attorney in order to assess the risk. At this point, based on previous experience, I woould try to focus on keeping the transaction together. IF the lender is talking about papers then they are referring to closing documents being prepared by their attorneys. If the file is at that stage then your loan has been approved and sent to closing. Alot of times these attorney's office require at least 24 to 48 hours in order to prepare and review documents prior to sending them to the title company. Once they get to title escrow officers must review them and prepare a HUD1 according to the lenders instructions and then submit the HUD to the lender for final approval. This takes time and if there are changes that need to be made it can take additional time.. Usually when a transaction gets to this point where deadlines aren't met and delays occur it is a result of poor and inconsistent communication. Delays can easily be anticipated and then communicated so that when they occur it comes as no surprise and everyone can adjust accordingly. I would try to get a clear and firm understanding of what exactly your lender means when they say that papers on their end are not ready yet. Ask, does that mean that our loan is approved out of underwriting and cleared for closing and a request has been sent to their attorneys office to prepare closing docs? If so then your not far from closing and I would hang in there if you can. If not then I would re-evaluate your situation and perhaps cut your losses and find another lender and/or house.
2 votes Thank Flag Link Wed Dec 22, 2010
Your realtor should have been submitting extensions for the closing to the listing realtor/seller to protect your deposit. Also, if you already have a committment letter, then, you generally do not have recourse to back out, unless, there was a job loss etc. You need to make sure that your realtor is in top of everything here and you really want to know, WHY, the constant delays with yoyur bank.
1 vote Thank Flag Link Thu Jan 6, 2011
Is that the only reason you want out? If you're financing a home and you plan on buying in your lifetime, chances are, this is going to happen again. Federal laws changed at the beginning of 2010 making oversight on loan procedures much tighter. If you don't have any other reason to cancel the contract, then stick with it.

Also, was the loan contingency removed? This late in the game, if you back out you most likely will lose your deposit and may be looking at a lawsuit. I recommend patience.

Cynthia I. Nakaya
Realtor, Tarbell, Realtors
Eastvale Office
12648 Limonite Avenue, Suite 2G
Corona, CA 92880
951.743.3321 Cell/ Text
951.270.1020 Fax
cnnak@aol.com
License # 01818243
Short Sale Certified
Turning House Calls into Homes
1 vote Thank Flag Link Wed Dec 29, 2010
If you are thinking about not signing, you need to get a real estate attorney.
Yes, you have signed a contract so there are potentially big issues if you are not willing to sign when they are ready.
Obviously this is very frustrating and you should be getting assistance from your realtor and everyone at the mortgage company....loan officer, their boss, the president's office, the seller's realtor....the title company. Often there is not much anyone can do. This is common and it is their money you are asking to borrow. Another alternative is to get a mortgage banker involved that could potentially close in 10 days or so.

Even when it doesn't seem like it, all these people are on your side. They want you to close, they want you to close on time. They want you to close quickly. None of them get paid until you close.

Good luck.
Web Reference: http://www.teamlynn.com
1 vote Thank Flag Link Wed Dec 22, 2010
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
Hello, Thirdy!
A Realtor would have some advice for you if you have hired one through a 'Buyers Representation Agreement. Did you hire a Realtor? Do you have a Realtor? Have you discussed this with Your Realtor? Have they recommended a Real Estate Attorney? Do they have all the facts? Also, in some instances due to the additional stress ....Buyer Remorse... occurs . Rembember it can also be stressful for the Seller. Making a decision while emotions are on a roller coaster is not usally the best way to handle a decision. Take a deep breath....talk to your Realtor (I hope you have one) and listen to your options, find out exactly where you are in the contract and any extentions, review them, ask his/her advice, ask if they know an attorney and if it is time to bring one into the mix, then make a choice. Without the facts any advice I might give you may fall short. Yes, there are legal and contractual repricussions and they can be hefty. This is why the knowledge and experience of a Realtor is so valuable.

If you did not hire a Realtor.... I can give you the name of an Attorney you could retain. Good Luck. KathleenRealtor1@gmail.com
1 vote Thank Flag Link Wed Dec 22, 2010
Youshould seek the advice of an attorney without delay. This is a legal question that should not, under any circumstances, be answered by a rel estate licensee unless said licensee is admitted to The Bar in your state and has agreed to represent you as an attorney.

Regards,

Richard Howell, CRS, GRI, ABR, CIPS
1 vote Thank Flag Link Wed Dec 22, 2010
Do you have a Realtor representing you in this transaction? If so, they should know the details of the contract, and whether or not you are binded in any way at this point. More than likely, you are binded to the contract by the seller. If you aren't currently represented by a Realtor in this transaction, then you definitely should consult an attorney today.
1 vote Thank Flag Link Wed Dec 22, 2010
All is governed by the sales agreement you need to speak with your buyers agent AND mortgage broker.

What has occurred does happen more times than you can imagine. The larger national banks have more of tendency to do this .

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
1 vote Thank Flag Link Wed Dec 22, 2010
Hello Thirdy,

You will lose your earnest money.
1 vote Thank Flag Link Wed Dec 22, 2010
It depends on what your real estate contract says and each state has their own. Did you agree to forfeit your earnest money if you don't close? You really need to talk to an attorney ASAP.
1 vote Thank Flag Link Wed Dec 22, 2010
I would seek the advice of a real estate attorney. Unfortionatly, this is occurning more and more with the new restrictions on the lending process.
0 votes Thank Flag Link Tue Jan 25, 2011
I would recommend that you speak with a Real Estate Attorney before you decide to back out of your agreement.
0 votes Thank Flag Link Fri Jan 14, 2011
Thirdy,
I am sorry you have had to endure this blunder. Please let me know if you would like some guidance and I will be glad to assist you.

Mirna Johnson
RE/MAX CityView
(832) 239-2475
0 votes Thank Flag Link Mon Jan 10, 2011
Thanks to all who gave their thoughts on my "real estate predicament" :-(. I really appreciate all the inputs you had on my situation. At this point, it seems I stand to lose my hard earned 5K earnest money to the sellers. That is after my wife sent a letter to (as told by lender broker) lender re withdrawal from transaction. I think we should have just let it pass without us being able to comply with more paperworks (explanations to this and that) they are asking for until they will ultimately declare our loan as "disapproved". I think they neither fully approved us to begin with nor denied our loan yet. I really think the lender should have checked everything first before even giving us approval on our initial application. My realtor said sellers are not thinking of pursuing the legal route but are interested on getting the deposit instead. Appraisal + home inspection + 5K earnest money = 6K blunder on my part. huhuhu :-(
0 votes Thank Flag Link Sun Jan 9, 2011
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