Real Estate Challenge

[HomeGuru]

**A: so here is what you do. The lender will only loan you 90% of the appraised value and therefore you have applied for but will not be able to secure this loan amount of $247,500. Therefore, based on the financing contingency, you have just cause to terminate the contract.
The loan program that does not need the appraisal is not an issue. The issue is the actual loan amount that the lender commits to

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I'm not sure I understand: The lender will lend me 90% of $275,000. They committed to $247,500. Two things that may apply:

**A: OK, then the lender will be giving you a mortgage of over 100% L/V.
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1- The contingency says privately insured conventional fixed mortagage but I have a conventional ARM mortgage.

**A: you must demand from the lender the exact program as stated in your purchase contract. And that is a conventional fixed rate mortgage amortized over 30 yearsat market rate interest. Where is your loan committment based on this criteria?
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2- A letter they sent me prior to this fiasco stated "This offer may also be contingent upon our receipt of a satisfactory appraisal of your property and the successful closing of your first mortgage on terms and conditions substantially similar to those originally offered.

**A: take a copy of the appraisal and your purchase contract and go down and meet with your loan officer.

 

[HomeGuru]

Writer, why is your real estate agent not explaining things to you?
Does your agent understand the financing contingencies in the contract?
Maybe you need to be talking to the principal broker.

 

[atrif]

My agent appears to be pretty good. He's been doing this for 18 years and he thought the financing contingency had us covered because no bank would provide better than 100% LTV. We never knew about this program, it was never disclosed to us.

Thanks for the help. It's quite a mess and I can't believe the lender would do this. It seems like the truth in lending act would require them share this info up front.

Another question: What is an executed sales contract (is it a purchase agreement)? I was supposed to submit one to the lender by 5/30/03.

 

[Souix]

**A: so here is what you do. The lender will only loan you 90% of the appraised value and therefore you have applied for but will not be able to secure this loan amount of $247,500. Therefore, based on the financing contingency, you have just cause to terminate the contract.
The loan program that does not need the appraisal is not an issue. The issue is the actual loan amount that the lender commits to

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I'm not sure I understand: The lender will lend me 90% of $275,000. They committed to $247,500. Two things that may apply:

1- The contingency says privately insured conventional fixed mortagage but I have a conventional ARM mortgage.

2- A letter they sent me prior to this fiasco stated "This offer may also be contingent upon our receipt of a satisfactory appraisal of your property and the successful closing of your first mortgage on terms and conditions substantially similar to those originally offered.

***90% of the "appraised value" is 238,000 x 90% = 214,200. I think this is what HGuru was talking about. Appraised value not sales price. Sales contract and purchase agreement are one in the same.***

 

[atrif]

I have been doing going through this process over the phone but I'm in that state now. I will take your advice and go see my loan officer in person.

In answer to your previous question: If you read back in this chain I typed the financing contingency verabatim.

 

[Souix]

I have been doing going through this process over the phone but I'm in that state now. I will take your advice and go see my loan officer in person.

In answer to your previous question: If you read back in this chain I typed the financing contingency verabatim.

***I think both you and your agent need to meet with the loan officer to get things straightened out.

 

[atrif]

I really think the lender has done me wrong on this one. The Commitment letter stated several things including:

ANY CREDITS/ALLOWANCES ARE SUBJECT TO LENDER'S LOAN-TO-VALUE AND UNDERWRITING REQUIREMENTS, AND MUST BE DISCLOSED TO WELLS FARGE HOME MORTGAGE PRIOR TO CLOSING. (their capitialization)

 

[atrif]

Good advice. Thanks Gentlemen. I'll let your know what happens. If the seller would just negotiate some I would be out of this mess but I don't see paying $37,000 more than a property is worth.

 

[HomeGuru]

Did you not read my posts? You already have an out.

 

[Souix]

I really think the lender has done me wrong on this one. The Commitment letter stated several things including:

ANY CREDITS/ALLOWANCES ARE SUBJECT TO LENDER'S LOAN-TO-VALUE AND UNDERWRITING REQUIREMENTS, AND MUST BE DISCLOSED TO WELLS FARGE HOME MORTGAGE PRIOR TO CLOSING. (their capitialization)

**Wells Fargo? You should have said something, they are the worst! Almost as bad as WAMU. i.e., predatory lending charges for both. Do a search for 'predatory lending' and see if you have been preyed upon.**

 

[atrif]

homeguru: Are you referring to the loan type being different? They have to provide me a loan of the type stated on the purchase agreement?

 

[HomeGuru]

homeguru: Are you referring to the loan type being different? They have to provide me a loan of the type stated on the purchase agreement?

**A: HELLO........Bingo....that's why i had you post the specific language in your contract so you could read it and ask your real estate agent's principal broker as to why your agent did not explain the financing contingencies to you.

 

[atrif]

The bank said the financing doesn't have to match the purchase agreeement as long as it covers the purchase price. Therefore they refused to re-characterize the loan which would force the financing contingency to apply. After spending considerable time on the phone with them they gave me a new letter of commitment that waived the processing fee, loan origination fee (was 1%) and there are no discount points. Because this will pretty much cover what I have tied up in earnest money I'm just going to offer the earnest money to the sellers and get out of this contract so I can find another house.

 

[HomeGuru]

The bank said the financing doesn't have to match the purchase agreeement as long as it covers the purchase price. Therefore they refused to re-characterize the loan which would force the financing contingency to apply. After spending considerable time on the phone with them they gave me a new letter of commitment that waived the processing fee, loan origination fee (was 1%) and there are no discount points. Because this will pretty much cover what I have tied up in earnest money I'm just going to offer the earnest money to the sellers and get out of this contract so I can find another house.

**A: ok, good luck to you. By the way, the bank was not a party to your contract.

 

[BrokerRE]

I'd take the new loan, and

get my earnest money back.

As homeguru says, the bank is not involved with the contract.

You have every right to get your earnest money back.

I'd simply tell the loan officer you want a fixed market rate conventional loan, if he says he can't provide it, tell him to put it in writing.

Get tough.