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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Real Estate Law
Satisfied Customers: 18137
Experience:  B.A.; M.B.A.; J.D.
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In Nov 2015 my daughter and I went to our bank and talked to

Customer Question

In Nov 2015 my daughter and I went to our bank and talked to a loan office to pre- qualify for a home loan. I explained that in August 2015 I retired my job of 12 years. 6 wks. later I felt I was not yet ready for this choice. My ex employer invited me to come back and work for them through a temp agency. So I did. The loan officer told he worked at a staffing agency so he's familiar how this all works. We pre-qualified for the loan.
We find a house and file for a FHA loan. The loan is denied because of my temp status. There guidelines require you to be at the temp agency for 18 months, I've only been there 5 months (I started back work on Sept. 15,2015). I am really upset, sad etc. you name it.
The loan officer says I remember you telling me that I screwed up. Here's what I can do so you won't lose the house. I talked to my boss and he says for us to file for a conventional loan. I'm still a temp! If the 1st loan didn't go through why would the 2nd one go through? He says their going to file for an exemption on the temp status.
I signed this contact with the seller on 1/16/16. Closing commitment 3/1/16.
He's trying to file the new loan first week in Feb. I'm telling him there's not enough time. He reassures me he can get it done and it will go through. I have 84 emails of everything that has happened since day 1.
Now all hell breaks loose because both real estate agents and the seller wants to know what's going on with Loan Commitment and when the appraisal. The appraisal was done on 2/10/16. It is 2/19/16 and the loan officer just sent me an email to let me know the underwriter just excepted the exemption for the temp status. Nothing was mentioned about loan commitment.
The real estate agent for the seller gave me a contact # ***** a mortgage broken he's been doing business with for 20 years. I talked to him explained what's been going on with the bank, he took my info, talked to his underwriter and they are willing to finance the home.
The loan officer has not offered any explanation to the real estate agents as to what's been going on so I did. He doesn't answer their emails , doesn't return their phone calls.
Every time he does do an update his answer is I'll know tomorrow. Tomorrow comes
and he tells us again I should definitely know something tomorrow. This has been going on all week.
The sellers agent has been understanding enough to still want to sell the house but he wants us to go with his mortgage broker. I don't have a problem with this.
I don't understand what the banks mission is at this point in time.
BIG QUESTION? If I go with the sellers Broker, can the bank turn around and sue me for breach of contact etc. ? All's I do is cry because this whole thing has turned into the worst nightmare ever and it's the banks fault. I have no idea what to do.
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Phillips Esq. replied 1 year ago.

I am so sorry to read about your difficulties.

No, you would not be in breach of contract for not going with the first lender. HOWEVER, a word of caution here, you should not jump at the Seller's Agent's suggestion to go to the lender that he has been using. The Seller's Agent is there for ONE THING AND ONE THING ONLY: TO MAKE A COMMISSION. The Seller's Agent does not care about the terms of your loan--whether you get a good deal or get ripped off. He is there to ensure that a sale happens and he gets his commission and goes off to another deal. You, the Buyer would be left to deal with the decision you made on the loan for years to come.

You must make sure to obtain an extension of the Mortgage Commitment Date and the Closing Date if you have not received a commitment to lend. This would ensure that you get your earnest money deposit back if you need to back out of the transaction because of lack of financing. Do not accept the Seller's or the Seller's agent's verbal assurances that the mortgage commitment date and the closing date would be extended and that you do not need to make a written request for any extension. REMEMBER, if it is not in writing, it does not count and the Seller or her agent would deny that you ever requested for an extension on the Mortgage Commitment Date and will use that to keep your earnest money deposit.

You have to very mindful of ALL the deadlines in your closing. The Mortgage Commitment Date being the most significant one. If you think that you are not gong to receive the mortgage commitment by the deadline stated on the contract--on the Purchase and Sale Agreement, you MUST immediately request for extension in writing from the Seller/Seller's Agent. You must also receive a confirmation that the request has been granted. Otherwise, you must give a written notice of your withdrawal from further negotiation of the Purchase and Sale Agreement due to lack of mortgage commitment and request full refund of your earnest money deposit.

Finally, the fact that the Seller's Agent's preferred mortgage broker's now says that he can finance the loan does not mean that he can actually do so. The loan still has to go to the underwriting department for approval.

The bot***** *****ne: you should not rush to get this house. You may live to regret your decision It is prudent to wait this out and go with an FHA loan, which has better terms. So, you may have to wait until you have been at your job for the requisite period of time to get the FHA loan to buy a house.

Best wishes,

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