Closed on Refi... new bank won't pay old bank

[slcst12]

We closed on a refi (std run of the mill conventional loan refi / no cash back, etc)

The new company was supposed to remit funds to the old mortgage company on Monday the 29th.
Due to Hurricane Sandy, they have refused to pay off my old bank.
Can they do this? They claim they are waiting on a FEMA 'zip code list' and ranted on about natural disasters, etc.
But... all they need to do is wire the money over to the old bank.
They even told me I may need to "re-close" the loan?
Can they just *NOT PAY* off the old loan? *AFTER* closing??!

 

[sandyclaus]

We closed on a refi (std run of the mill conventional loan refi / no cash back, etc)

The new company was supposed to remit funds to the old mortgage company on Monday the 29th.
Due to Hurricane Sandy, they have refused to pay off my old bank.
Can they do this? They claim they are waiting on a FEMA 'zip code list' and ranted on about natural disasters, etc.
But... all they need to do is wire the money over to the old bank.
They even told me I may need to "re-close" the loan?
Can they just *NOT PAY* off the old loan? *AFTER* closing??!

What do you mean, "due to Hurricane Sandy, they have refused to pay off my old bank"???

Perhaps there is a delay due to issues in the area, which is quite understandable. Even the Stock Exchange closed down for a couple of days in NY because of the weather, and there were significant issues with power outages which still exist in some areas.

I think you are misunderstanding. I don't think they mean NEVER to pay off the old bank, simply that the process is delayed due to other delays in the chain of events necessary to make it happen. I'm sure that this whole mess is affecting thousands of people, and you are not so special that they would be doing this to just you.

I suggest that you take a step back and BREATHE. Then have a coherent conversation with the new bank and ask them when they expect to be able to complete this transaction for you. At the point where they say they have to reverse the entire process, THAT's when you start panicking - NOT UNTIL.

 

[sandyclaus]

Additional information with a question: The property on which you got the refi, did it happen to be located in the disaster area following Hurricane Sandy? Was the property damaged or destroyed? Is there a pending insurance claim for any damages to the property?

If you answer yes to any of those, that could certainly account for a delay. No bank is going to process a refi on a property that either was significantly damaged or destroyed in a hurricane.

 

[slcst12]

Thanks for responses.

Property is located in PA, so technically affected by the storm. But my whole development is fine, save for a few tree branches.
House did not sustain any damage, and there are no pending insurance claims.

It's not that I'm panicking (yet). I just don't understand how long they can sit on the money (AFTER closing) or how they could even suggest that I need to "re-close".
I get they might want to send a dude out to verify the house didn't blow away, but I guess I don't understand the timing.

From where I'm sitting...it seems like they could sit on this thing for 3 months. . . or more.

 

[CSO286]

Thanks for responses.

Property is located in PA, so technically affected by the storm. But my whole development is fine, save for a few tree branches.
House did not sustain any damage, and there are no pending insurance claims.

It's not that I'm panicking (yet). I just don't understand how long they can sit on the money (AFTER closing) or how they could even suggest that I need to "re-close".
I get they might want to send a dude out to verify the house didn't blow away, but I guess I don't understand the timing.

From where I'm sitting...it seems like they could sit on this thing for 3 months. . . or more.

I doubt it has as much to do with the property itself, as it has to do with IT-type issues related to power outages, etc with the banks......

 

[sandyclaus]

This could also be a factor: http://blogs.wsj.com/law/2012/10/31/in-sdny-speedy-trial-clock-stops-ticking/

This specifically involves the courts in NY, but it's possible that similar circumstances affected banks and other financial entities. I can also see transportation being an issue for a lot of folks.

 

[LdiJ]

Thanks for responses.

Property is located in PA, so technically affected by the storm. But my whole development is fine, save for a few tree branches.
House did not sustain any damage, and there are no pending insurance claims.

It's not that I'm panicking (yet). I just don't understand how long they can sit on the money (AFTER closing) or how they could even suggest that I need to "re-close".
I get they might want to send a dude out to verify the house didn't blow away, but I guess I don't understand the timing.

From where I'm sitting...it seems like they could sit on this thing for 3 months. . . or more.

While I can certainly understand your concern regarding the whole "may need to reclose bit" I would also urge you not to panic yet. Give it a couple of days and then call them again.