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Hello everyone! My husband and I found ourselves the perfect home here in Florida... put in an offer and win! That was at the end of Feb. The closing date was set for March 31st. We had all of our paperwork and things from our end turned in to the mortgage officer by the 14th. (homeowners insurance was the last thing turned in the rest was turned in during the first week of March... including the home inspection, appraisal, etc.) For the next two weeks we get told every couple of days that everything is progressing fine and even are asked if it would be a problem if we closed early. To which of course we were like "NO! That would be great!!!" Monday the 26th we get a phone call saying that they just now discovered that the home was an FHA flip and that now they have to do a second appraisal so we need to get an extension. We are assured that we will be closing next week but get a two week extension just in case. Here we are at the end of the second week... today was the day we were supposed to be closing. And as of yesterday we are told that basically the mortgage people waited to the last possible minute to do anything and because of that everything has snowballed and now there is a 5% chance we 'might' close next week... and they will consider it lucky if we can even close by the end of the month. They had us sign another extension until the 27th. The seller has made it pretty clear that they will NOT sign another extension.... yet it doesn't sound like our mortgage guy seems to care or is doing his job period and isn't very confident we'll even be able to close by this now second extension date.
So my question to everyone is what are our options? Can we take all of our paperwork (since everything is done... including the second appraisal) and go to a different lender and see if they could push it through faster? We don't want to lose this house and right now we're feeling incredibly helpless watching as some random person is causing our dream home to be lost. It's beyond frusterating considering we are having zero control over all of this... us and the sellers had everything done super early. Also because of this our apartment we are in has a lease pending on our apartment because we were supposed to be out by the end of this week so we now have to go to a hotel while we wait. (Family of 4... two small children) Any advise would be wonderful.
Monday the 26th we get a phone call saying that they just now discovered that the home was an FHA flip and that now they have to do a second appraisal so we need to get an extension. We are assured that we will be closing next week but get a two week extension just in case. Here we are at the end of the second week... today was the day we were supposed to be closing. And as of yesterday we are told that basically the mortgage people waited to the last possible minute to do anything and .......
So my question to everyone is what are our options? Can we take all of our paperwork (since everything is done... including the second appraisal) and go to a different lender and see if they could push it through faster?
-Missy-
Who told you this? That someone said this, does not automatically make it true. The FHA ruling was designed primarily to protect you from over paying for property and thus your lender from lending you more money than the property may be worth.
While you certainly can reapply with another lender, they will do their own due dilligence including appraisal (s) and it will add time to closing and not achieve your goals.
When we use other people's money to buy anything, we no longer control the outcomes. My advise is to hang tight.
well actually he didn't do any of his part prior to the monday before closing... which is why he didn't find out it was an FHA flip until then. my realtor's exact words to him (we were on a 3way call) was 'why the hell did you wait so damn long to even look at the paperwork?' Basically he thought everything was perfectly fine so didn't bother looking at anything prior because he assumed it was going to fly through smoothly. Hence now it's snowballing and we're basically losing the house now because the sellers aren't going on waiting more than 2 months to close on it.
So we heard it from the mortgage guy himself because he says he assumed everything was in order.
Actually, there's a finger to point at everyone, including the listing agent, who should have advised the buyer's agent this was a flip. There's protocol set up for flips to move forward, but not in a couple days.
The OP said everything took 2 weeks to get the file into underwriting, from the end of February to March 14. Many lenders have controls in place so that the appraisal travels directly from the appraisal management company directly to the Direct Endorsement Underwriter. If that were the case, the processor wouldn't have even have known it was a flip. Even if the processor did see the appraisal before submission, he or she was in a hurry to get the file before an underwriter and only did a cursory check on value and repairs required. Either way, it's not an excuse, but a very reasonable explanation. Other than the appraisal, the only other place a flip would be found is in the title work, which usually comes in just before closing.
While this situation is certainly frustrating, if the lister kept quiet and the buyer's agent didn't inquire about the timing of the recent rehab, why is the lender the only one on the hook for the flip? An experienced buyer's agent would have caught this out right out of the gate at the time of viewing. Personally, I don't think your lender dropped the ball.
Ya I was kind of wondering why it was such a surprise to everyone that it was a flip considering we had looked ourselves and seen when and how much the seller had bought it for back in December. We assumed everyone else knew this as well lol. Anyways so my question is... is there any action we can take to rectify this? I mean we have 2 weeks to get this closed .... the seller has said that they will not sign a 3rd extension or if they do that they are going to take away concessions. Should we look for a new lender? What are your opinions on this? We do NOT want to lose the house. Everything has been done both appraisals, waivers for the FHA flip, etc. If we take all that to a different lender would they be able to get it pushed through in two weeks? Or do we continue to sit and wait with our current one? Our current one by the way took 1.5weeks of the first 2 week extension just to order the second appraisal to be done... so my confidence in them doing anything in a timely fashion is not exactly very strong.
Is there other interest in the property? If not, the seller could just be making a bunch of noise. If the seller doesn't have another offer to replace yours then they would be better off having you try to work things out. They may be upset and they may say they're going to do this and that but in the end many sellers across the country don't have too many options because it's still a buyer's market in many places.
I'll refrain from blaming any particular person in this situation. Some lenders can close loans a lot faster than others. So if you do decide to switch mortgage companies go to a very reputable lender. That doesn't necessarily mean large lender but I mean stay away from the small lenders who don't do much business and the Internet lenders who claim to have the lowest rates. Good luck!
from what I have seen FL has seen uptick in property selling that is not distress status--
as this house has been through that process probably which is why it is an FHA flip
get your agent to pull some comps that have sold in past 30 days--since your contract happened--in that same neighborhood
the sellers may have more trouble than they think getting buyer
we have friends who moved from TX to FL couple of years ago
selling their house was the problem because the buyers were from out of country and had a RE agent who was not US born either--she did not know the downpayment had to be in bank account for at least 30 days before closing
they had to put off their initial closing in TX--reapply for their mortgage in FL--talk the FL sellers into waiting more than 30 days to close on the house they wanted
the only reason it worked was that the FL sellers were in totally dead market
and the only bright side was because they had to reapply for a mortgage after the first closing failed, they got lower mortgage rate
I'm in that same exact situation here in texas, I was looking this up on google and found this thread I thought my wife posted it since it was signed missy,my wifes named melissa and a family of 4 one on the waylol but our situation is identical to yours. Today is suppose to be our day to close and we tried a second amendment to contract and seller did not accept so now they are taking 100 dollars from closing help until we close. Its been a nightmare. Have you closed on your home yet?
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