Home Buying in Howell>Question Details

e.keats424, Home Buyer in Berkeley, NJ

What recourse do we have after learning of a mistake our lawyer and realtor made on a mortgage contract?

Asked by e.keats424, Berkeley, NJ Sat Dec 8, 2012

We are 2 weeks away from closing on a new construction home. Our finances have allowed us to put down 20% on a $410,000 home, we've been pre-approved for the mortgage and were waiting for the mortgage commitment from the lender to come through soon. Yesterday, we received notification from the lender that the mortgage has been suspended due to a mistake our lawyer made and the underwriter caught within the past few days. Apparently our lawyer documented on said contract that we will be purchasing the existing new construction along with a fence, closet shelving, a garage-door opener and window screens to be added shortly (the home was still being finished). The Mortgage Rep claims that these 'after-market' additions is considered enticement to purchase a home and against Fannie Mae guidelines and the law thus suspending our mortgage approval. They claim this cannot simply be overlooked as a mistake and a new contract would need to be re-drawn. This would severely affect the closing.

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I'm with these guys. If these items hadn't been written in, what would you have done if the builder didn't provide them?

To answer your question, only an attorney can advise you on what "recourse" you may have; preferably, not the same attorney that is working on the transaction.

To respond to your answer to John, appreciate what you have and don't even think about how it used to be. The past is past - work this deal out and move on.

All the best,
2 votes Thank Flag Link Sat Dec 8, 2012
I am not an attorney, but you the contract sounds standard of inclusive items. It sounds more of the bank having an issue with the wording of what is in the contract.

I have put together a zillion contracts that read the included items such as stove, refridge, all window treatments, pool supplies and pool cleaning items... I recently had ONE weird mortgage rep that said the underwriter would not accept the contract with these on the document as they were personal items. The attorney told them they are part of the home sale and were not going to be removed.

I have had same with new construction, reads the same way as yours...
Again, I am not a lawyer but to me, It sounds like it is the mortgage company, not the lawyer or Realtor.

Recourse? Like what a lawsuit? Cash to you? Probably not.
2 votes Thank Flag Link Sat Dec 8, 2012
John, also thanks for the reply. I'm not jumping to a suit nor cash back (at this point) we just want this issue rectified by one of the professionals working FOR us (i.e. the lawyer, realtor, mortgage rep) that we are paying. To me, it seems almost criminal that I have to lose a house and money because one of the people I've hired to guide us through these negotiations has screwed up somewhere. This is in no means my fault-infact I've gone above and beyond what's been requested of me-getting paperwork returned in record time to the requesting parties. We were initially told we are IDEAL CLIENTS. We have the required 20% to avoid PMI, we have credit scores in the 800's, both gainfully employed with no outstanding debt (other than a car payment) and we sold our property already. It seems unfair that we're having issues getting a mortgage when-in the recent past-I've watched people who couldn't find 2 dimes to rub together have no problems getting a $500,000 home approved.
Flag Sat Dec 8, 2012
You got me as to how the Realtor got into the blame you mentioned, the lawyer being involved trumps anything a Realtor does. But I would not even call it a mistake. This happens all the time, the lawyer was being honest and describing what is being sold with the house. The lender, being crazy fickle weird people, want the contracts void of any mention of extras - sometimes - and sometimes they don't mind it being in a contract (hence the term fickle I used). It falls to the underwriter who tries to find things that "might" affect the loan. They are using experience and and guessing Fannie might kick it back if it is in the contract, so they would rather you not mention it even though it is there. Weird right? That's the way it works, better to not tell all the truth in the offer. It should not delay it any longer than it takes mr lawyer to write it up without telling them everything that is included.
2 votes Thank Flag Link Sat Dec 8, 2012
Thanks for responding Tim. The reason I mentioned the Realtor in the first place is because the Realtor used his own company's template to draw up the initial contract and (i.e. added in the fence, GDO, etc. by hand on the last page) effectively creating the issue. We do not know whom to hold at fault. We are inclined to believe this is ultimately our lawyer's fault. He should've known better when he reviewed the contract, however that doesn't really ease our minds. We do not understand why the lender won't even let us re-write the contract and simply exclude the last page and resubmit it. The mortgage lender states that once their underwriter sees the error, he has to believe those terms were accurate and can't "just forget that he ever saw it." In their eye these items were "enticements" to buy and that is illegal. So frustrating after months of waiting to get into this house.
Flag Sat Dec 8, 2012
I would remove them from the contract and create a bill of sale in the amount of $10 to be paid to the seller listing these as items separate from the purchase of the home. The bill of sale should be signed by both parties.

Francesca Patrizio, Broker Sales Associate
732.606.2931 (Cell)
1 vote Thank Flag Link Sat Dec 8, 2012
Sounds like your attorney or Realtor were trying to protect you. what would you have done if they did not write them in the contract and you did not get these items from the builder. I hope you read the contract and saw them in there. Sounds like they know what they are doing and will work it out. Any recourse will cost you more than it is worth.
0 votes Thank Flag Link Sun Dec 9, 2012
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