Home Selling in New Jersey>Question Details

Confused_sel…, Both Buyer and Seller in Bridgewater, NJ

I'm the seller, buyer's mortgage commitment date and closing date have expired.

Asked by Confused_seller, Bridgewater, NJ Thu May 27, 2010

I'm the seller, we accepted and signed the contract 4/10/10, buyer got a conditional approval for loan dated 4/26/10. mortgage commitment date on contract is 5/17/10, but we had a rider for use and occupancy agreement signed and dated 4/28/10. on both the contract and the rider, it is stated that "The closing date shall occur no later than May 25, 2010". We have not received as of today 5/27/10 the final mortgage commitment from buyer or the lender, therefore there's no way to close tomorrow. Would that mean they're defaulted? can we terminate contract or negotiate an extension for U&A ? Please advise..

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Debbie- i will delete the other one, but will post what the answers to your comments:

conditional loan approval was dated 4/26/10. our mortgage commitment date on the contract was 5/17/10. then since we need to also find a house to buy or rent, we requested a use and occupancy till june 25. rider agreement was signed by both parties on 4/28/10, part of the mortgage contingency on the rider is this "In the event the Buyers are not issued a mortgage or a letter of declination within thirty (30) days following the execution of the Rider, then the Seller may either terminate the Contract or grant the Buyers an extension
of time to obtain their mortgage commitment. " that date will be tomorrow. but both the contract and the rider stated that "The closing date shall occur no later than May 25, 2010", which already passed. we have not received any request for an extension. Both my realtor and my lawyer are telling me that the conditional approval is the buyers mortgage commitment, which confused me because based on the research I did, that's not the firm mortgage approval/final approval for the mortgage. Now, we cannot sign a lease for a house because we dont currently have a closing date because the original has already expired.
1 vote Thank Flag Link Thu May 27, 2010
Those are all great questions you got so far. What I would like you to see you do is call your lawyer and ask him or her when the closing is. If there are any real issues you will find out then and should be explained to you.
0 votes Thank Flag Link Mon May 31, 2010
Confused, the conditional commitment/approval is usually what is referred to in the contract as a mortgage commitment. Generally, commitments are conditional. A commitment might only have minimal conditions such as the buyer having to obtain homeowner's insurance and clear title, but they almost always have conditions that must be satisfied.

Based on what you described below, it sounds like your buyer got their commitment.

It happens at times that the conditions can't be met for a variety of reasons, ranging from improper disclosure by the buyer to neglect by the loan officer.

In any case, even once conditions are met, the bank would have to issue a "clear to close" and most banks would still need anywhere from 24 hours to up to a week to close-depending on the bank you are dealing with.

I hope this was helpful, but please post if you have any more questions.

Good luck!
0 votes Thank Flag Link Sun May 30, 2010
Dear Confused:
As stated by the Mortgage Broker that answered "All commitments come with conditinal approval " I am confused on the Rider for Use and Occupancy though. Please explain. This as well is a holiday weekend, they are backed up and will be playing catch up next week as well. I would have to advise you to advise your counsel to send an extension and a "Time is of the Essence" letter out as well. Know that if your commitment date and have counsel extend the closing date as well. Like any contract these dates have expired! and Time is of the Essence to renew contract. Because nothing has been extended if I am not mistaken you or the buyer could terminate. Extensions should of been filed. Call your counsel.
0 votes Thank Flag Link Sat May 29, 2010
Confused - I need to defer to your attorney for the answer to that question......however, based on what I think you said previously, the attorney already said this commitment satisfied the contingency in the contract.

Please verify this with your attorney.
Please know that all commitments have some conditions that need to be met in order to close.

Have a nice holiday weekend........
0 votes Thank Flag Link Fri May 28, 2010
i have another question...is a conditional commitment/approval the same or can it act as the mortgage commitment that is required and stated in the contract?
0 votes Thank Flag Link Fri May 28, 2010
Dear confused_sel,
The mortgage commitment expiration date is based on the oldest documents in the file. No document can be older than 90 days, with paystubs only good for 60 days thus that could be the reason the commitment is going to expire and that is easily rectified with newer documents.

Large banks B of A, Wells, etc. are taking upwads of 60 days + to process loan files. These banks have a minimum lock requirement of 60 days.

With all that said the chances of closing today or Tuesday are slim. A file usually needs 48 hours after clearing underwriting before the closing department can close the loan.
Another issue may be that there is no title search done yet since only a conditional approval with many conditions was issued the buyers attorney may not have done the title search. Ask your attorney to look into this.
Good luck with the sale Confused. Best wishes to you and have a great day no matter what!
0 votes Thank Flag Link Fri May 28, 2010
I'm afraid to say, but the chances of this working out by tomorrow are slim to none.
The conditions listed are typical - why they weren't taken care of by now, I don't know.

Have the buyers decided they don't want to buy the home? Has your attorney reached out to their attorney to see what is going on? Has your agent reached out to the other agent to see what they think is going on?

Seems like there is a lot of sitting around with nothing being accomplished.

The rates are still low, so if they have to lock in a new rate, that shouldn't be an issue.
The real issue is.................do they still want the house, and if so, why aren't they working at getting this closed.
0 votes Thank Flag Link Thu May 27, 2010
Debbie- In order to get the final approval is contingent to "borrower to provide" or "lender to obtain" some of the conditions are most recent bank statement showing X amount of dollars, letter of explanation for several bank deposits with given dates and amount, satisfactory evidence that the buyer has X amount of dollars in liquid assets before closing...
the conditional approval also stated that their interest rate lock is expiring on 6/1. and that if they cannot close or fund on by that date, they'll lose their rate and in additional that the lender is no longer obliged by the conditional loan approval...
what are the chances that things can be straighten out by tomorrow if they had the conditional approval since 4/26? that's a month ago... we were only informed about the issue last friday 5/21...
0 votes Thank Flag Link Thu May 27, 2010
HI again Confused...

OK .........so your answers have caused me to ask more questions.
You have an agent, and you have an attorney. Good.
You really need to sit down with them and go over all of this. It's difficult to comment without all the particulars.

You said there was a "conditional" approval granted in April 26............conditional on what?
Most commitments do have a number of conditions that have to be met before the loan can close.
Is there something holding the process up? If os......what is it? Surely your attorney can get the answer to that question.

If your lawyer is stating that the approval the buyers have IS their commitiment, and they have therefore fulfulled the contingency..........then ask him why there is no firm closing date!!

You need to have him explain to you exactly what the status is....and when you can expect to close. Then, and only then, will you be able to move forward ............it's good that you can remain in the home after the closing, before signing a lease.
Once a new closing date is determined, you should still be able to have the 30 days following the closing for a U&O

Call your attorney in the morning, and ask him to please explain what is going on.
0 votes Thank Flag Link Thu May 27, 2010
on friday 5/21 we were informed that they had problems with getting the loan. then on 5/24/10, they had to remove the buyer's spouse from the loan through an addendum dated 5/24/10. one thing that confused me is that their conditional approval that was dated 4/26/10, did not have the buyer's spouse name in the first place. does that sound right to you?
0 votes Thank Flag Link Thu May 27, 2010
A lot of mortgage companies are taking longer than usual to give final approvals lately. It could be they are just delayed but they should be keeping you informed. I'd strongly recommend you contact your realtor & your lawyer & have them get some staus updates from the buyers side. The buyers should be the ones asking for an extension if they really want to buy your house. If there is a problem resolving the conditions of their loan & you find out they don't think it is going to be approved better you find out now & get your house back on the market as soon as possible
0 votes Thank Flag Link Thu May 27, 2010
Confused - you duplicated this question.
I answered this already on the other thread.......you might want to delete this one
0 votes Thank Flag Link Thu May 27, 2010
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