Buying a vacation home in Michigan. I need to switch brokers.

Asked by Oc2012, Orange, CA Tue Feb 28, 2012

I've been working with a mortgage broker for 5 months trying to close on a house. Its been a nightmare. They have bad communication and possibly little knowledge and I have til tomorrow to close, already has been extended twice. The seller is willing to extended the process longer if we switch to a new mortgage broker of their choice. I need to give my real estate agent permission to pick up my file and take it to the new broker. They don't want to release my file. What are my legal rights? Please help. Thanks

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Deborah Garvin’s answer
Deborah Garv…, Mortgage Broker Or Lender, San Diego, CA
Tue Jun 5, 2012
This is an older question, so I assume the chips have fallen where they may; however, I am sorry I missed the question because this is important informaiton to share.

NO! A seller does not have the right to direct who a buyer works with for financing. Goodness knows, builders insist this all the time; however, there is no law or requirement that a borrower follows their directive. That said, the seller does have every right to refuse an offer of purchase. The seller/listing agent may have inside knowledge on the lender a borrower is working with and have reservations about the lenders ability to close the deal. In that case, they would probably say "get a new lender".

There is very little of a mortgage file that cannot be "reproduced" quite easily, so there is virtually no need for your current lender to release the file to a new lender. The exception would be VA, FHA or specific programs that have a registration number....since you are buying a vacation home and none of these programs are applicable, this would be a non-issue.

All the new lender needs to do is get updated financials from you (after five months they are needed anyway), get the title and purchase contract from the title/escrow company, order new credit (again, needed anyway)...you will probably need to buy a new appraisal....again, needed anyway. NOTE: All documentation is a mortgage file must be no older than 90 - 120 days...and most lenders in today's market want everything within 30 days. Therefore, virtually nothing the original lender has is of any value for the purpose of closing a loan.

Hope this information helps anyone who is in the position of needing to/or considering switching to a new lender.
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Michelle Car…, Agent, Coppertino, AL
Fri Mar 2, 2012
You will need some help with this one. A broker I trust told me the seller does have the right to control the lender, so talk with your RE agent's broker and see what can be arranged. Everyone has been working on it for 5 months, so unless you have a case for fraud or that they have materially (financially) hurt you, it may be challenging to get the first mortgage broker to let go.
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