Last Day Change?

Imightmovein · Joined: 25 Mar 2006 Posts: 4

Ok, Im suppose to go to closing today......
Well I hear from the builder that the bank did not get all the paperwork for the lawyer together in time to close today, its going to be monday instead. At 3:00pm today the bank calls and says there is a "problem". The rate I was approved at, and had a 45 day lock on, might not happen. The underwriters needed this or that etc etc. Basicly I was set on a 5.875% loan, approved and locked for close to 2 months, everything is fine no problems, then at 3:00pm on the day of closing Im told they might have to go to 6.875%.....Im not a math teacher but 1% on $200,000 x 30 years fixed is a little more than pocket change. The bank says they are working on this or that to get it to go through but Im not to confident with them at this point.

So, basicly, if they come back and say that they could not close at the 5.875% Im going with another lender. I scared to think they are just testing the waters to see if they can pull out some extra profit at the last minute thinking I will be excited and jump at it to get into my new house. But if thats the case or not, I might choose a different lender based on principle (how the hell are you going to change the loan at 3:00pm on the day of the closing). Any suggestions on how to proceed from this point? If they are going to start me from scratch and a new % Id rather give it to somebody else at this point. Any lenders out there that will match 5.875% 0 point on $200,000 (including closing, house amount $196,000) with somebody pushing a credit score of close to 700 (which would be higher if not for all the pings on credit report to get this loan) and makes between $50,000 and $55,000 year? BTW, apprasial came in at $260,000 in NC.

HHHEEEELPPP!

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Did you ever receive a lock confirmation from them? You said the builder said, is the builder also your broker? That could get a little awkward.

I'm kind of wondering which type of loan you were looking at, that's going to determine whether or not you will be able to get a 5.875% loan with no points. I have some thoughts, but I don't want to state those unless we've had a chance to talk further about it.

I'd be happy to talk further with you about this, and if you qualified under our mortgage express program, we could likely even push it to get it done for you this week. Any other scenario and I'd say it would be difficult.

If you want to give me a call, I will PM my Cell phone number to you and I'd be happy to talk with you about it later today.

lil_oh_me · Joined: 04 Jan 2006 Posts: 35 Location: Grand Rapids, MI

This is a very unhappy and awkward situation as apparently the loan
has not funded within the 45 days of the locked period. It should not
be up to the borrower to come up with the rate lock confirmation.

At the point in time it appeared you were in danger of not closing
within the lock period you should have been contacted with that
unhappy news and given the option and the details of any costs involved
with extending the lock.

Rates have certainly moved within the last 60 days; however, not
enough to validate a 1% increase unless that includes are rather nasty
clip for not funding in time.

In fairness, I would ask for a detailed explanation of what occured and
why were not notified prior to this.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Quote: It should not
be up to the borrower to come up with the rate lock confirmation.

I wasn't requesting they produce it, rather confirming if they ever got one. My guess is that the lender never locked the loan in hopes that they would be able to capitalize on a drop in the market, and instead ended up getting hosed. Either that, or it was a 30 day lock and they were trying to get it done within a free extension period and since that didn't happen, they are now trying to recover costs and rate by charging it to the borrower.

lil_oh_me · Joined: 04 Jan 2006 Posts: 35 Location: Grand Rapids, MI

I think you have it the nail squarely on the head, Haplo. It was a foolish
move in this market.

sd · Joined: 07 Mar 2006 Posts: 19

You should be able to get a 6.125 fixed 30 yr right now at NO points or Origination Fee. 5.875 is not there at no cost. Of course this all depends if nothing has changed since the original quote on your financial situation. Your radar is up and well it shoud be. We wish you the best in your new home. Do not get robbed out of your hard earned money for years to come.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Of course, if you can buy it from someone who's selling wholesale.

Imightmovein · Joined: 25 Mar 2006 Posts: 4

Sorry to just now reply back, had to pull a long shift at work today.

Sorry if I wasnt clear on a few things I posted so Ill try to clear it up :)

I didnt let the builder set up the loan, he was part of the 3 way circle of trying to coordinate the closing time of when the lawyer, bank, and builder could meet. I sought out my own loan and chose a local bank.

Im still within my lock period. I was approved for the loan at 5.875 then locked it in for 45 days which has not expired yet.

I have kept in touch with the bank the entire time. I have asked if there is anything else I need to do at this point, or at closing. I have asked if everything is still running smoothly are there any changes. I have been told the entire time "no we have everything we need, you are all set, all we need for us to close is for the house to be finished (obtain a CO)".

The house was completed last Tuesday, a Certificate of Occupancy issued, scheduled to close on Friday.

Im told Thursday night by the builder that we might not be able to close on Friday because the bank did not provide the lawyer with the package yet so they will not have time to prepare. Then after 3pm on the day of the closing Im told there might be a problem closing at 5.875 because of the underwriter crunching the numbers my approval has changed from an A+ rating to an A- rating which will not qualify for the 5.875 and will turn into a 6.875. The even had the nerve to try to offer me an ARM at a higher rate than my locked rate.

Can they approve me, lock me in at a rate of 5.875 then change the approval and rate on the day of closing? Is that legal? I that normal? Should I report them or go up the chain of command with their institution? Or am I wasting time on a lost cause and they can do whatever like and Im just SOL?

Sorry for all the mistakes, its late and Im tired and frustrated hehe

m2c · Joined: 03 Aug 2005 Posts: 937

I’m going to take a flyer and assume you’re a “real” person in a “real” situation. Tons of red flags though – closing on Saturday, refusal to close at locked rate within lock period, inability to have paperwork (normally a two-hour procedure include review of documents), 32% “over” appraisal although to unload “spec’ new construction it’s possible, abnormally low initial quote on an 103% LTV loan, A+ to A-, have no idea of what this garbage means at this point in loan processing.

I think SD’s 6.125% note rate with 0/0 is a pipe dream even if you were putting 5% down much less with zero down and financed closing costs. Your first mistake was going to a bank – in general, higher level of incompetence than with a broker although some broker shop never cease to amaze me. My guess is that someone at the bank branch screwed up the note rate quote using a 5% down assumption. How things weren’t detected in the processing stage is anyone’s guess much less how a conforming approval was later changed AFTER underwriting to an “alt A”. Not being given a written lock is VERY strange. These protect the lender or broker as much as the applicant. In some jurisdictions, e.g., liberal Massachusetts, brokers are not permitted to give written “locks”. (Only a government mind in MA could think this to be “pro-consumer”?) Never seen similar reasoning applied to banks.

At any rate you may want to take the “aggrieved and mislead consumer” persona. There was probably a screw up along the way by the bank and you don’t have any commitment in writing, so negotiate. Probably won’t get the 5.875% but there’s likely a compromise position. I’d CONSIDER printing out the historic net yields on efanniemae.com before speaking with management at the bank. Idea is to demonstrate the lack of large movement in rates (sic) from the time of lock. This is a two-edge sword – these are NET yields, not rates and do not take into consideration SRPs. What you need to emphasize is MOVEMENT not absolute “rate”.

Lesson to be learned – for a real estate mortgage you usually want to go to a broker rather than a bank. In fact, I’m surprised a bank is making a 103% mortgage.

Imightmovein · Joined: 25 Mar 2006 Posts: 4

I think I might take that approach. I appreciate all the comments, this has been a very trying and stressful weekend.

This closing was suppose to be on Friday not Saturday, one more thing I was probably not clear on in my frustration.

The loan was to be $200,000 on a $260,000 apprasial. My down payment was the land which I already owned. I think this falls around 76% loan to value ratio (was told it needed to be 80% or less). I dont know if this is the norm but once again I went over this completely with the bank and everything was approved and agreed upon. And now they want me to brink $4,000 to closing as well which I was told on Friday which I had to produce ths weekend out of the blue which luckily I was able to on such short notice.

m2c · Joined: 03 Aug 2005 Posts: 937

Ops, I was “Zulu”ed! Can never remember whether it’s 5o 6 hours or plus or minus for that matter. That straightens out the Saturday close though.

Contribution of land you already own towards down payment changes EVERYTHING. Now you’re in standard conforming territory with 20+% down. Makes the 5.875% 0/0 “lock” a month or so ago realistic but the 6.875% now even weirder. There’s got to be something you’re not mentioning. Once your rate is locked and underwriting completed, things just “don’t change like this”. A possible exception might be if you furnished, say, a “created” pay stub and the bank put though a quick 4506 (very unusual procedure) and caught this “creative writing”.

Since you already own the land complicates the resolution to your situation since it may bring up mechanic lien issues depending on state law. You could be damned if you close and damned if you don’t. You likely could not switch to a different lender due to lien priority. Really sounds possible that the bank is dealing from the bottom on the deck on this one.

Haplo can chime in on this one, but even IF you could start over with a different broker, I think a realistic rate would be 6.375% with 0/0. Just keep this level in mind when you speak with MANAGEMENT at the bank. When you set up an appointment you might mention that a reporter from the local newspaper wants to tag along.

The more you tell us about this situation, the more bizarre it becomes. This type of thing just doesn’t happen. Are you sure you forgot to tell us that the same bank just repossessed your car? Ops, I was “Zulu”ed! Can never remember whether it’s 5o 6 hours or plus or minus for that matter. That straightens out the Saturday close though.

Contribution of land you already own towards down payment changes EVERYTHING. Now you’re in standard conforming territory with 20+% down. Makes the 5.875% 0/0 “lock” a month or so ago realistic but the 6.875% now even weirder. There’s got to be something you’re not mentioning. Once your rate is locked and underwriting completed, things just “don’t change like this”. A possible exception might be if you furnished, say, a “created” pay stub and the bank put though a quick 4506 (very unusual procedure) and caught this “creative writing”.

Since you already own the land complicates the resolution to your situation since it may bring up mechanic lien issues depending on state law. You could be damned if you close and damned if you don’t. You likely could not switch to a different lender due to lien priority. Really sounds possible that the bank is dealing from the bottom on the deck on this one.

Haplo can chime in on this one, but even IF you could start over with a different broker, I think a realistic rate would be 6.375% with 0/0. Just keep this level in mind when you speak with MANAGEMENT at the bank. When you set up an appointment you might mention that a reporter from the local newspaper wants to tag along.

The more you tell us about this situation, the more bizarre it becomes. This type of thing just doesn’t happen. Are you sure you forgot to tell us that the same bank just repossessed your car? You may well wish to consult an attorney if you cannot get to some resonable compromise with the bank but the lack of a "lock" agreement hurts.

chow · Posted: Mon Mar 27, 2006 2:29 pm Post subject:

mrc

<I can't figure out if I need to delete the studdered paragraphs or they were intentional.> :lol:

imightmovein?

There's a bank down the street from my house in Looney Tuneville.

It's called the "Last Bank and Trust"

There's some scraggy looking dog sitting behind a nice desk, and a spastic, non flying type bird running around the lobby. Last time I stopped in, they were downloading some new desk top underwriting system from a company called ACME.

The lines of unsuspecting consumers where getting some great deals. They were all buying homes in some new subdivision called "Swampland Estates."

In all seriousness, you need to contact your state offices for any division this bank falls under. Find out who the Bank Officer's are. One or several of them has to take ownership of this "quagmire." If they are a real bank-this is unacceptable behaviour. I've bought loans in the secondary market from most of the larger banks in the midwest for Lehman Brothers-and they don't act like this. I would be hard pressed to find a mortgage broker who could yank you along this far-and drop a bomb like this.

lil_oh_me · Joined: 04 Jan 2006 Posts: 35 Location: Grand Rapids, MI

This is like an onion with layers and layers.

Bottom line; the bank can not deliver the 5.875% unless you are
willing to buy it down. Speak to management as you have been
advised to do and get to the heart of the matter. Your best bet
is to negotiate the terms and rate with the bank rather than pull
up stakes at this point. If you intend to keep this property for at
least 7 years I would recommend a fixed rate.

Why did you select this bank? Was it the rate they offered?

m2c · Joined: 03 Aug 2005 Posts: 937

Well, I was hoping the denouement was posted this pm. Very strange situation if some essential fact hasn’t been left out. Inform us what happened. INQUIRYING MINDS WANT TO KNOW!

I’ve had real trouble with banks recently – must be something in the water they’re drinking. For the second time in as many months I’ve had to suggest I will withdraw company funds from the bank cause wholesale “fools” aren’t paying attention. Childish? Yes. Penalizes the wrong person (branch manager)? Yes. But it’s effective!

Generally I’d rather not sell to bank, but for some products ……

Imightmovein · Joined: 25 Mar 2006 Posts: 4

Ok, after reading everyones replies and talking to alot of friends and coworkers I was armed are ready to do whatever it took to get this straightened out today.

Got a call from the bank still wanting our company's number for employment and salary verification early this morning (Monday). Gave them the info and they said they would send it right over to the underwriter. Recieved another call a few hours later telling me that the underwriter finished the packet and sent it to the lawyer but it was to late to close today and it will be tomorrow before we do so.

What blew my mind is they acted like the 4 hour fiasco (and my near heart attack) with the rate change on Friday never happened. I was almost scared to ask....."Well? What rate did they send in the packet?" 5.875, the original rate was the answer, THEY ACTED LIKE NOTHING EVER HAPPENED!. Like I had a bad dream or something. You would think hearing the call today there was never an issue.

I feel like Fox Mulder in an episode of the X-Files. Were they just testing the waters to see if they could squeeze more at the last minute? Did they realize they really goofed up and they needed to fix it before it got out of hand? After hearing that I was scared to raise the question untill after closing in fear of dragging it on any further. Ill close and settle everthing then find out why :wink:

I selected this bank for a few reasons. I have done business with them before, car loan. Felt safter dealing with a local bank than randomly selecting a lender I never heard of off the web. I know there are alot of great ones out there on the web but as my luck goes (as you can see from this hehe) I would get worst of the lot. They had the lowest or equal to the lowest rate I could find among the bigger names I was familar with or ones people I know recomended. Basicly my ignorance of the process thinking the best rate was the best lender for me. Dont get me wrong, they where the easiest, friendliest part of the entire home process until this one BIG incident. When I get to the bottom of the reason why all this happened Ill post it here as well. If I can help somebody else from having this happen to them then Ill feel better about the whole situation.

Thank you all once again for your advice and support!

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