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Hi, I'm a veteran and I had been approved for a $500,000 VA loan and commitment from a mortgage company. I found a nice house in New York and I made an offer of $520,000, which was accepted. I put $20,000 down which is now sitting in an escrow account. Soon thereafter and for some unknown reason, a manager from the mortgage company rescinded the amount of $500,000 and changed it to $450,000.
They said the reason was that the loan officer doing my loan made a mistake in the loan amount. They also said that the person is no longer handling my account or working for the company, and that I was to be assigned a new loan officer. The new loan officer advised me that my new loan amount was $450,000, and that in order for me to now buy that house I needed to come up with $50,000, plus another $20,000+ for closing costs.
I was very upset with this news, but I told them and the seller that I would try to come up with the difference. A short while after, I told them both that I was unsuccessful and I was not able to come up with the additional amount. Since then, they immediately put the house back on the market.
After my real estate attorney drew up and submitted all the necessary paperwork to have the money refunded out of the escrow account, the seller is now refusing to refund any of my money back. Most recently, my real estate attorney said the seller told her that they want at least half of it, and that's where I stand as of now. I feel that I am not at fault and want all of my money back.
Since the seller is holding my $20,000 at ransom, I am being unduly inconvenienced which has created a severe hardship for me and my family because I now have "no financial flexibility" when trying to negotiate and purchase a house without it! So, if we signed a contract in the beginning and no one as of yet has signed a “CANCELLATION AND RELEASE FORM”, can they sell the house to someone else and keep my $20,000?
Does the contract allow you an "out" if you can't get financing? If so then your attorney needs to get your money back. If not, you may be in for a long haul.
Hi, I'm a veteran and I had been approved for a $500,000 VA loan and commitment from a mortgage company. I found a nice house in New York and I made an offer of $520,000, which was accepted. I put $20,000 down which is now sitting in an escrow account. Soon thereafter and for some unknown reason, a manager from the mortgage company rescinded the amount of $500,000 and changed it to $450,000.
They said the reason was that the loan officer doing my loan made a mistake in the loan amount. They also said that the person is no longer handling my account or working for the company, and that I was to be assigned a new loan officer. The new loan officer advised me that my new loan amount was $450,000, and that in order for me to now buy that house I needed to come up with $50,000, plus another $20,000+ for closing costs.
I was very upset with this news, but I told them and the seller that I would try to come up with the difference. A short while after, I told them both that I was unsuccessful and I was not able to come up with the additional amount. Since then, they immediately put the house back on the market.
After my real estate attorney drew up and submitted all the necessary paperwork to have the money refunded out of the escrow account, the seller is now refusing to refund any of my money back. Most recently, my real estate attorney said the seller told her that they want at least half of it, and that's where I stand as of now. I feel that I am not at fault and want all of my money back.
Since the seller is holding my $20,000 at ransom, I am being unduly inconvenienced which has created a severe hardship for me and my family because I now have "no financial flexibility" when trying to negotiate and purchase a house without it! So, if we signed a contract in the beginning and no one as of yet has signed a “CANCELLATION AND RELEASE FORM”, can they sell the house to someone else and keep my $20,000?
Sounds like the appraisal (most done electronically now) doesn’t warrant the loan amount. Unless, like you stated you come up with the difference. Your attorney should be fighting for you.
Let me get this clear, you are taking out a $500k loan for a $520k house? Essentially you are putting down less than 5% on a house? How did anyone approve of your loan in the first place? Is this even on Long Island?
Let me get this clear, you are taking out a $500k loan for a $520k house? Essentially you are putting down less than 5% on a house? How did anyone approve of your loan in the first place? Is this even on Long Island?
OP made clear he is a vet and $20k is about 3.5% down on a VA loan, which on paper doesn't seem fishy. However, the whole situation seems sketchy based upon the information provided. It sounds as if the OP got a pre-approval for the loan and an accepted offer from the seller; however, the house is not worth $520k and the OP can't get a loan over the appraised value. This is something that should've been clear in the contract in regards to outs for either party and it's clear the OP cannot get financing for the house. The OP is along for the ride and learning 2 hard lessons. 1) don't sign a contract without understanding all facets. 2) If $20k is all you have for a downpayment, renting is not a bad option as you have 0 margin for error unless you're looking in low income areas.
Let me get this clear, you are taking out a $500k loan for a $520k house? Essentially you are putting down less than 5% on a house? How did anyone approve of your loan in the first place? Is this even on Long Island?
OP said VA loan, they offer no money down loans w/ no PMI and better rates than you can get.
Unless his lawyer is useless there is an out if you are unable to secure financing. It is standard practice, the seller took the risk also. My house should be in contract today or tomorrow We didn't even consider any offers that had less than 30% cash. If for some crazy reason he did a not contingent on a mortgage then OP is screwed.
In a standard contract, once a "mortgage commitment" is issued by the bank, there is no "out" unless the house appraisal comes back for less than the contract amount.
The only way you have an out after a commitment is issued is IF your attorney included language in his/her rider allowing you to do so.
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