Home Buying in 46307>Question Details

Khall11304, Home Buyer in Crown Point, IN

Our realtor has notified us that the buyers' lending institution has asked for pictures of our home "empty" - or they will not process the buyers'

Asked by Khall11304, Crown Point, IN Sat Sep 21, 2013

loan. Seems like this is a ploy to allow the new owner to complete her end of the closing and be able to move in sooner. Is this ethical?

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It is highly unlikely and probably illegal for a lender to ask for the seller to move out before closing. It is possible if inspection or appraisal report pointed out any potential material defect that is covered or concealed. In that case, the lender may ask for that area to be cleared out for inspection.
On the other hand, it is possible that your suspicion is correct. Ask your realtor to show lender's condition either in the commitment or in any other print form.
1 vote Thank Flag Link Sat Sep 21, 2013
This is something that shouldn't come as a surprise as lenders are asking for some pretty ridiculous documentation these days. Some feel they have literally "crossed the line."

There is however sound reasoning behind why this request has been made. Mortgage lenders finance real property. They do not and will not finance personal property. Since the furnishing presently in the home represent personal property, they are likely seeking reassurance that their funds are being used to purchase the home and not the furniture.

This request has nothing to do with the buyer's ability to move in sooner than later....and is intended to protect the lender only!

Hope this is helpful,

Bill
0 votes Thank Flag Link Sat Sep 21, 2013
Maybe your Realtor is not fluent in mortgage mumbo jumbo or there is something you forgot to mention here. If there isn’t a problem on your side, in default on your loan, liens against the house etc. there is no reason for a lender to ever suggest such a thing. I can’t imagine a legitimate lender suggesting such a condition even if there is an issue on your side of the table.

I have never heard of a prior-to-processing condition, don’t even know how the lender would know the property is occupied prior to ordering an appraisal which isn’t done until they start processing the loan application. SOOOOO, just based on what you have shared I would guess your home is located in a somewhat isolated location/area, the buyer isn’t for real, neither is the lender, it is a scam to get you out of the house so they can steal the wiring, plumbing, HVAC, anything else attached of value.

Make an appointment to visit the loan officer that conveyed the condition to your agent and insist meeting in their office. I suspect this is the quickest route to finding out the truth, good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
I answer questions about financing real estate based on my decades of experience dealing with mortgage underwriters. I do not offer legal or tax advice, if you need answers from an attorney or CPA find one knowledgeable in your local market.
Web Reference: http://jamessimms.com/
0 votes Thank Flag Link Sat Sep 21, 2013
if you do not have it in written form from the lender, you need to get it. I would bet you will not get it. this does not sound like a lender request.
0 votes Thank Flag Link Sat Sep 21, 2013
This is a very odd request. It sounds like there is more to the situation. Paragraphs G and H of your purchase agreement clarify the terms of closing date and possession unless you have something in further conditions. You should call your real estate agent's managing broker and talk to them if you are not satisfied with what you are being told. They should be able to resolve the issue.
0 votes Thank Flag Link Sat Sep 21, 2013
That is absolutely ridiculous!! Your realtors broker should contact the lender immediately to see what the reasoning behind this ludicrous request is. Is there something in the purchase agreement allowing possession prior to closing? You can call the lender yourself to get to the bottom of it. Ask to speak with the underwriter.

Bill Vossos - Associate Broker
Century 21 Executive Realty
"Making the American Dream a Reality"
219.680.9037 - Cell
219.852.8052 - Direct Fax
0 votes Thank Flag Link Sat Sep 21, 2013
Do you have this in writing? I would ask the lender to put it in writing as I am betting they won't because that is very unusual. I wonder if you are just being told this. Have your agent contact the lender for information about this.
0 votes Thank Flag Link Sat Sep 21, 2013
Hi Khall11304,

I have NEVER heard of this. Check your purchase contract for date of possession. Date of possession is when you have to be moved out - which should have nothing to do with the buyer's lender. Maybe the buyers should find a different lender?

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
0 votes Thank Flag Link Sat Sep 21, 2013
That sounds a bit odd, we're a local mortgage lender, if you'd like you can give us a call and we would be happy to help. We're located in Merrillville, IN.

Ed Stojancevich
A&M Mortgage Group
219.973.6644 or the office number is 219.794.0600 ext: 253
0 votes Thank Flag Link Sat Sep 21, 2013
I have never heard of this. I have experienced lenders requiring a re-inspection by an appraiser when something specific was agreed to in the contract ("to finish kitchen addition") or demanded by an underwriter ("reinspect to confirm addition is completed"), but never what you mention. Your contract may specify something I'm unaware of requiring it though.
Sometimes the way you understand the information given to you is lost in translation when it goes from the lender to the buyer's agent to your agent and then to you. This could be the case as well. I am guessing you don't have hundreds or thousands of transactions under your belt. You may wish to use an attorney to assist you. Although many agents practicing only in Indiana will tell you it is not common to use them, it can still be a very good idea when issues get sticky. They are used in Illinois all of the time and it often helps as you have two people on your team working for you, both with different perspective and one with the legal ability to act on your behalf. They are used on almost every transaction in Illinois. It's just accepted as a part of the transaction.
There are several attorneys who specialize in real estate in and around Crown Point (I just referred one to a client on a particularly interesting transaction). They do not cost that much. Considering the size of the transaction I believe they are generally a great investment.
Have your attorney communicate with the lender and other side. The goal is not to upset the transaction, but to keep all hands above board so the transaction closes smoothly with no undue duress on your behalf.
Good luck and you can feel free to call for referrals.
Tony Mitidiero
RE/MAX Synergy
708-259-3734
0 votes Thank Flag Link Sat Sep 21, 2013
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