Commitment Letter, Appraisal Issue and Choosing lender. Pls advice -

Asked by Dan, New York Thu Jul 30, 2009

I applied at 2 Banks (say A and B) for home mortgage. Both of them gave a commitment/approval letter. The Lawyer sent out the Letter from Bank A to the sellers as part of the commitment related clause in the contract. Bank A had done the appraisal before the commitment date and their appraisal value came equal to the contact value. Bank B got the appraisal after the commitment letter from Bank A was sent out and it has fallen short of the contract value by 11K. I really want to go with Bank B and am talking to my lawyer. My Realtor is telling me that I could be in a legal bind and have to do the closing scheduled for 8/7 with Bank A since their commitment letter was used. What options do I have?

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4
Francesca Pa…, Agent, Manasquan, NJ
Fri Jul 31, 2009
Dan,

Go with the advice fo your legal representation. Three is way too much garbage happening to worry about an appraisale that came in a $1k less tan expected.

Love abd Peace,
Francesca, Realtor, ePro
732.606.2931 (24/7)
Web Reference:  http://www.PatrozoRE.com
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Thu Jul 30, 2009
Dan, it looks like you have asked and answered your own question!

Yes, you might have had your attorney ask for an extension, but he already alerted the sellers that you had a committment in place (from Bank A), so you already fulfilled the contingency.........if you did ask for the extension, if it's any consolation, the sellers probably would have said no, not wanting to delay the closing.,

By the way, I would always defer to the attorney on a legal matter, not a Realtor.

I read the article you attached, and I had a similar experience to what was discussed. My buyer lost his job 2 weeks prior to our closing. The mortgage committment was revoked because of that. At first, the sellers' attorney tried to say they were entitled to keep the 10% deposit ($50,000).......but in the end my buyers got their money back. Since the contract was contingent on them obtaining a mortgage..and that mortgage was refused, even though the committment had been received initially, it was deemed that they were entitled to the return of their deposit.
This economy has put a lot of new obstacles in the way of buyers for sure...appraisals are just one of them!

Good luck with your purchase.............enjoy your new home!
Debbie Rose
Prudential NJ Properties
0 votes
Dan, Home Buyer, New York
Thu Jul 30, 2009
Seems the answer is here in the NY times article

http://www.nytimes.com/1999/07/18/realestate/your-home-mortg…

I should have exercised my right to ask for a 10 day extension to the Mortgage contingency clause.
0 votes
Dan, Home Buyer, New York
Thu Jul 30, 2009
Can I get out of the contract if the seller does not agree to negotiate? My lawyer is saying that once the commitment letter is given it's the end of the story for me.
0 votes
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