Can I back out of mortgage loan? Will I have to pay penalties? (loan officer, credit report) - Mortgages -Lenders, loans, financing, rates, foreclosures, short-sales, brokers, credit score, deed, lien, refinancing, borrowers - City-Data Forum

mre0609 · 06-23-2009, 11:21 AM

I am buying a home and submitted an application for mortgage about a month ago. I've been working with this loan company since 11/08 on trying to get a mortgage. The first loan fell through b/c of some problems with the community well that the underwriters did not like. So this is my second time around with this company on a different house. I was told the loan would close last week, but then it didn't. My loan officer came back with several conditions that I had to send in. It's been one thing after another with the underwriters, and I thought all my credit issues should've been taken care of when they looked at my file the first time around....
Well, this past weekend, the owners of the home I'm trying to buy offered me owner financing, at a much better terms than the loan agency did. I accepted and we are set to close tomorrow (wow it only took 3 days to close!). Anyways, I contacted my loan officer and told her to cancel my application. Now she is threatening to make me pay the title fee and loan fees, even though I am not closing with them anymore. She told me that the lawyers office would usually eat the cost of the first title search (which I had no control over that not closing) but I would have to pay for the second title search...Can they do this?

Modification Specialist · 06-23-2009, 11:51 AM

If you still want the property - you can do a "Rent Back", signing an agreement with the owners, paying them rent until your loan goes through.

If you want to walk away, the broker cannot charge you for something they didn't delivery (the loan). Besides if too much time passes, they are rerquired by the investor to run a new credit credit and a new title report.

I was a loan officer for 8 eight years, out of the 1000's of loans I wrote, there were a few borrowers that loans did not go through. I remember you have to qualify borrowers for loan, then wait for the appraisal to come back. Then the title search was ordered.

If a title search was ordered and an appraisal came back with a low value. Who was responsible for paying for the title report - the broker..

They can't do anything to hold you responsible for paying.......

mre0609 · 06-23-2009, 11:57 AM

I paid for the appraisal and that all came back above purchase price. Everything has just taken so long and I am frustrated with the loan company. My loan officer said she would send me an invoice for all the work they did, but do I have to pay? I am not closing with them.

The funny thing is that when I told my loan officer this, she told me that she was all set to close Thursday....NEWS TO ME!!! That was the first time I had heard that....plus I didn't send in my underwriter conditions, so there is no way the loan should close without them....
Should I just ignore the threats?

Pfhtex · 06-26-2009, 06:21 PM

You are not liable to pay for anything. Cease all verbal communication. Tell them to communicate with you only in writing. This will straighten out any attempts to coerce you into a loan with them.

suzie02 · 06-26-2009, 11:34 PM

Quote:

Originally Posted by mre0609

I paid for the appraisal and that all came back above purchase price. Everything has just taken so long and I am frustrated with the loan company. My loan officer said she would send me an invoice for all the work they did, but do I have to pay? I am not closing with them.

The funny thing is that when I told my loan officer this, she told me that she was all set to close Thursday....NEWS TO ME!!! That was the first time I had heard that....plus I didn't send in my underwriter conditions, so there is no way the loan should close without them....
Should I just ignore the threats?

Did you sign anything that says you are responsible for any costs if you do not close? I've never had lender ask to sign anything like that but check just in case. If you didn't then tell the loan officer that that was not part of the agreement and to stop harassing you or you'll file a complaint against them.
Usually the only thing you loose is the application fee that pays for the appraisal and the credit report.