I closed on a 203k loan with an escrow
of 27k for repairs to be done to the home about 6 weeks ago. The home needed an additional 13k in repairs that the 27k didn't cover and we gave this money in cash to the "approved" contractor
for this 203k loan. We were told at closing the loan was now being serviced by another lender. The loan officer has been very evasive with when the funds were being disbursed and the contractor was growing impatient. The contractor ultimately divulged to me that he was unlicensed and that the loan officer told him this wouldn't be a problem, but that the new lender is requiring he be licensed and this is why its taking so long to release the funds.
About 4 weeks after closing the contractor did become licensed, which i verified via our government county website. Upon researching, FHA
203K Streamline's should only use a licensed and insured contractor with work commencing within 30 days after closing.
The problem here is that the contractor hasn't performed the duties described in our written contract because he has yet to receive a single penny from the bank. This work includes the removal of mold-laden sheetrock, an absolute hazard for my 1 year old child. Another major problem is that the first mortgage
payment was due one week ago, yet I am still paying for rent at my current apartment
because I cannot move in to an unlivable house.
Long story short:
1)The bank used an unlicensed contractor to approve a streamline 203k.
2)its been over 30 days and ZERO monies have been disbursed.
3)I am now burdened with a mortgage
payment for a home I don't reside in, and a monthly rental payment.
I have done everything on my part to work this transaction in good faith, yet all I get is a run-around from the loan officer. Would it be wise to advise the loan officer to defer my mortgage payment or pay for my payments or should I be contacting HUD
/FHA? Should I "threaten" and make them aware I know why the delay in disbursement has occurred? I am unsure of how to proceed. I would rather be amicable and be able to move in to my home. Keep in mind, the loan officer has no idea I know he approved a 203k using an unlicensed contractor.