OfflineHello all! My wife and I are new investors and we are in the process of buying our first home. In the process of buying our home, we have discovered a problem that we may run into during our future investments. We have a lender who has completely dropped the ball over and over. It has gotten to a point where my realtor, the sellers realtor, and My wife and I want these people punished. We ended up having to offer $7,000 more for the house because of the lender screwed up and informed us this midway through the process. We have even changed the closing date twice and they are trying to get us to change it again because of once again, their error. Besides the BBB, who can I report them to? I would hate for someone else to experience this problem.
Lender Issue
Posted on: Tue, 04/15/2008 - 03:44
I have honestly never heard of something as silly as you having to offer $7000 more for the house do to the lender. Do not complete the mortgage or sign on the dotted line until that is resolved. Also,walk away from that bank and goto another one. Let the current lender know that they have not fulfilled their obligations and you are displeased,tell them you would like to cancel the mortgage and you are going elsewhere. You will have to ask for an extension from your realtor.
You've got to find your obstacles and call them out! Unsheath the sword, and do battle with whatever it is that holds you back!
That might be the most ludicrous thing i have ever heard.YEAH, I agree with cbr you need to get out while you still can, you better NOT give an additional $7,000 because thier a bunch of idiots, that's THIER FAULT, why should you be punished for thier negligence, I sure hope that i don't see you putting up another post saying that you ended up paying the $7,000 YOUR HERO,SULLY.
YOUR HERO, SULLY
Unfortunately, we found out about this error after all inspections were paid for and we were pretty deep into the process. We used a down payment assistance program in which the lender told our realtor that the seller did not need to know about it and that nothing was needed in the contract about the program. After the contract was accepted and we started shelling out money for inspections and what not, we were told that the seller had to agree to 3% of the down. This would have been fine had that been the only involvment the seller needed but we had also got them to agree to 6% seller concessions. We knew 9% would get shot down now and we had a great deal on our hands. Long story short, we offered more to keep the deal and to convince the seller 9% was ok. It only got worse from there however. I could write a whole book on this one loan but the good news is, even with the extra money we had to shell out, it is still a great deal. The property was priced at 189k and it made a dramatic drop to 129k. The seller wants to jump ship and trying to start all over may run her into another buyer. I just want that company to pay when it is all said and done.
I completely agree with cbrpower and sully get out of this deal. In no way should you pay $7,000. If the seller has a problem with this walk away if you can. You can call your states attorneys generals office and tell them the situation. They will direct you to the agency you need to talk to. If you really want the house go to another lender or a mortgage broker. Only buy the house at the original price you agreed to. No extra money if it is not in the contract.
On a higher level, maybe there is a better house waiting for you.
Let us know what happens.
OK, first of all if you negotiated 9% back at closing. That can't be written in the contract that way. That's true. The next thing I am going to tell you is very,very important and I hope it is something you will always remember. If you put together a deal at a certain price and that deal makes sense at that price but then it changes and you have a couple hundred dollars and some time involved DON'T TRADE $7000 DOLLARS FOR $275 DOLLARS! Always be willing to walk away knowing you could have lost a lot more. I have walked away many times after the inspection was done. It would cost $200-$350 dollars to do so but, it was worth it. Sometimes, like in your case, the deal is still sweet enough even after the mistakes that it is worth it. One thing I am confused about. 3% isn't $7000K of $129K. I am not sure I understand the math. Make sure that you have all of your ducks in a row on this because if you goto a lawyer or the BBB you will get eaten alive if this is not adding up.
You've got to find your obstacles and call them out! Unsheath the sword, and do battle with whatever it is that holds you back!
This is a good advice for anyone starting out....you said if you "put together a deal at a certain price and that deal makes sense at THAT price but then changes"...that can mean that it is no longer the great deal it was originally...
I will use this mantra when numbers no longer add up. Not getting emotionally involved is key and to remember that it's better to loose a few hundred dollars and look at the bright side...thanks, good advice
Challenges are only challenges if you view them that way. Try looking at them as OPPORTUNITIES instead and success will follow!!! "ME"
I have a very simple question, "Who wrote this offer?"
Do you have the suggested escape clauses in your contract?
If you don't like the deal, use them.
If you don't understand what you are getting into, please for your own sake, ask questions before you enter into a contract and then amend it.
A little more study time will prevent this from happening.
Your comment," I could write a whole book on this one loan" has me wondering what other important information your not telling us.
Well thank you all for your input. From the sounds of it, this thing could have became a lot worse. I say "I could have wrote a book on this deal", only because of the many problems that we have had with. I figured the deal to still be great, since it was for our personal residence and there was still a lot to gain from the home in the future. There was nothing wrong with the house, it sat on a large lot, it's minutes from the gulf, and it is down the street from a new luxury condo project. There is alot going on around the house. I could get out of the deal if I am unable to get financing but I figured I would take the hit now for a big gain later. I guess that is why I am here, I have a lot to learn...
I think you are doing great! Just by "doing" you are impressing me. I hope the replies to your posts don't sound to critical. I can tell you this, I have made so many mistakes that have cost me a lot of money it is unreal. One thing is true though, when I make a mistake and it costs me a few grand...I learn very fast. Only you have a true feel for the projects you are working on because we aren't there. Banks are a neccessary evil....
You've got to find your obstacles and call them out! Unsheath the sword, and do battle with whatever it is that holds you back!
Your future home sounds great. I'm sorry if my last post was very to the point. As you can see from the posts that are above, things can spiral out of control when details are held back. Personally I have learned a lesson from this, and that is to ask more questions so I can give better advise/comments. Also not to jump to conclusions so quickly. My hope is that you have an extremely successful adventure with real estate and that you continue to use these posts.
All the best to you and your family,
Cash Flow King
PS. Your experience with your first deal is not the norm. Once this first one closes, they get easier the more you do. Many great successes!!!!