If I got verbal bank approval of our housing loan, can we remove our loan contingency? (It's the last contingency we have). We'll be

Asked by Mindy, Millbrae, CA Thu Dec 23, 2010

signing the loan documents next week.

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11
, ,
Fri Dec 24, 2010
Hi Mindy,

Someone sure seems to be pressuring you to remove your loan contingency. In the last answers to your question (including mine), here -

http://www.trulia.com/voices/Home_Buying/We_made_an_offer_to…

- everyone was telling advising you NOT to remove it.

What happens if the bank's verbal approval does not go through for one reason or another? I've seen this happen. Many other real estate professional who have been in the business for a number of years have seen it happen...look at the examples below. Will you lose the house? To rub salt in your wounds, will you also lose your earnest money deposit on top of losing the house & all the costs associated with buying the home?

Has your loan originator volunteered to talk to the seller's listing agent for you?

Good luck,
Ros

Roswell Moore, CMPS
Certified Mortgage Planner
480-422-5095 direct
http://www.ezAZloan.com

We are a Direct Lender, Mortgage Bank where we originate, process, underwrite and fund FHA, 203k, VA, USDA, Jumbo, Conventional, loans to Canadians & other Foreign Nationals, on time.
0 votes
Maddox, , Menifee, CA
Thu Dec 23, 2010
I agree with all the answers below. Get something in writing that clearly shows that you have been fully approved for the loan you requested. These days verbal will not get you anywhere. Your good faith deposit is at stake here and that is alot of money to lose out on if contingencies have been removed and your loan does not fund.
0 votes
Louri Groves…, Agent, Fountain Valley, CA
Thu Dec 23, 2010
Hi Mindy,

I think this is one of the few times that every Realtor or real estate agent will agree. Get it writing from the lender before you release the loan contingency. Something can happen between today and next week. The lender's representative can quit or get fired, docs can get lost, additional conditions are needed before the lender funds the loan, etc....

Congratulations on your upcoming purchase! Happy Holidays too!

Louri Groves
0 votes
The Laugesen…, Agent, Burlingame, CA
Thu Dec 23, 2010
Dear Mindy,

I only allow my clients to remove their loan approval once we have a proposal from the lender that clearly states our interest rate, loan amount and for what terms and are they any other items they are requesting from us to make the loan, many times lenders have a long laundry list prior to funding loans, it is important for you to see that list and make sure you can provide and answer to the lenders approval any outstanding items... Good luck to you, I am sure your agent is telling you the same things we all have mentioned....

Happy Holidays

Denise Laugesen
Top 1% President's Elite
Coldwell Banker
North San Mateo Office
email: deniselaugesen@comcast.ent
direct line: 650-403-6225
cell: 650-465-5742
web: http://www.deniselaugesenteam.com
0 votes
Dallas Texas, Agent, Dallas, TN
Thu Dec 23, 2010
Your mortgage broker and possibly Realtor can assist you with all you question(s) and experts representing you in this transaction.

I would have all in writing HUGE difference between verbal and in writing

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
0 votes
CJ Brasiel, Agent, San Jose, CA
Thu Dec 23, 2010
Mindy -

Request a written approval. With the approval, the loan officer should have received a list of conditions. Most are minor but make sure you see that list and that you have confidence you can work with your loan officer to resolve those conditions before releasing any contingency for loan approval.

I assume you have an appraisal contingency as well. Make sure the appraisal is in at purchase price or above and has been approved by underwriter. Always get a copy of the appraisal and review thoroughly.

Finally, pay attention to your contingency time line. If you need to extend, do so before the date, not after the date. It is good to keep the seller updated with progress.

Good luck!
CJ
Web Reference:  http://www.TalkToCJ.com
0 votes
, ,
Thu Dec 23, 2010
Mindy, I'll throw in my opinion as a lender - if you are not contractually obligated to remove the financing contingency at this point I wouldn't do it. Is your lender willing to refund you the lost earnest deposit if the transaction doesn't close for some reason? That was a rhetorical question - of course they won't. :)

You might be ok on your approval but the real estate agents on this forum can probably list dozens of transactions they've been involved in that didn't close escrow even after the bank said the loan was "approved."

When I give clients a verbal approval I normally include a conversation about whether it's an "unconditional" approval or if there are still potential deal killers outstanding.

Your lender WILL have a written record of your loan approval and there's no reason they can't provide it to you via fax or email in about 5 minutes...unless they are unwilling or unable.

You are probably fine but I wouldn't want to risk the earnest money deposit.
0 votes
Edward Soren…, Agent, Davis, CA
Thu Dec 23, 2010
Hello Mindy,

One absolutely hard and fast rule I have about the real estate business is:

"If it's not in writing, it's not real estate..."

I never, ever, ever rely on the verbal assurances of ANYTHING anyone tells me when I am involved in a real estate transaction.

That includes home buyers, home owners, real estate agents, inspectors, contractors, escrow officers or lenders.

If it's not in writing, the information cannot be verified or relied upon.

Also, per California Civil Code Section 1624, ninety nine percent of issues involved around a real estate contract has to be in writing to be enforceable.

My advice is, if someone tells you something related to your transaction, ask to see exactly where that verbal communication is backed up by something in writing.

So, to answer your question, if I were working with you, and you don't have written proof that your loan is solid, and if you still have time remaining to complete your loan contingency, I would tell you to definitely not remove it.

Best of luck to you.

Please let us know how your real estate transaction works out.

Thanks,

Edward

When It's Time To Sell Your Home, Over Paying Is Over Rated
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Edward Sorensen
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Sorensen And Associates
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0 votes
Phil Rotondo, Agent, Melbourne, FL
Thu Dec 23, 2010
Mindy;
Verbals are not worth the paper they are printed on.
Writing, writing, writing
Web Reference:  http://www.321property.com
0 votes
Anna M Brocco, Agent, Williston Park, NY
Thu Dec 23, 2010
Oftentimes, verbal can mean nothing--get the approval in writing beforehand....
0 votes
Paula Snow B…, Agent, Pace, FL
Thu Dec 23, 2010
Make sure you get everything in writing.
Good Luck and Merry Christmas!
Paula
0 votes
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