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Old 07-30-2009, 01:50 PM
 
2 posts, read 15,322 times
Reputation: 10

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hi Guys
we signed a home sale contract (in NJ)and went thru the inspection, attorney review,we even got the mortgage commitment and then just the day before the closing lender declined a loan saying underwriter is not satisfied with the documents we provided. when we spoke to our attorney she is encouraging us to extend the contract and go for an other lender saying that we might loose the down payment money(17000$) if the seller claims for breach of contract. we asked the lender to send us the decline letter for which they said they r going to send us the withdrawal letter.Our attorney says declining letter is the only way to get out of the contract and not the withdrawal letter. we tried to contact the mortgage agent and he doesn't respond to our e-mails and also doesn't pick up our calls.This loan contact was fully through telephone and already 8 working days have passed since they have verbally declined.

My question is whether the withdrawal letter and mortgage decline letter is the same or not???.. and also how to get the decline letter if the mortgage agent is not answering us and how long does the lender take to send out the mortgage decline/withdrawn letter????.Please help
do we have a chance of loosing our down payment monies?there is no loss to the seller because the value of the house has increased and he has put it bk into the market for 20k more.If at all we ask for extension and still we couldnot get a loan ,then do we loose down payment monies..please advice

Last edited by 17lincoln; 07-30-2009 at 02:02 PM..
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Old 07-30-2009, 01:58 PM
 
Location: Vermont
5,440 posts, read 16,039,911 times
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Sounds like me that what the attorney is saying is if you voluntarily withdraw, you lose your money. If you are simply being denied a mortgage (part of your mortgage stipulation) then you should get to keep your down payment money.

I am sure the bank is going to give you this in writing. Might have to hound them.

If you want the house, I would speak with the guys at Untitled Document to see if you can figure out how to get a real loan ASAP.
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Old 07-30-2009, 02:13 PM
 
357 posts, read 977,561 times
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17lincoln, I'm no expert but here is where your lawayer needs to go to bat for you. This is out of your control and there has to be a way out of this. Having said that, this is the exact reason why it is important to go with a good/reputable mortgage company. I would not give up so quickly try to get another mortgage asap, if you need a referal I know someone that should be able to help you out - PM me. Good luck.
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Old 07-30-2009, 02:19 PM
 
2 posts, read 15,322 times
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Hi Joe

Thanks for the quick reply.our Attorney meant that if the reason for withdrawing the commitment by the lender is saying that the borrower is risky and that he does not have sufficient funds (we had sufficient to close the loan)then you might loose down payment monies. we are very concerned with these kind of denials and not responding to us coz we are not able to take a decision and our down payment is stuck and we donno what we have to do...
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Old 07-30-2009, 03:41 PM
 
Location: New Jersey
10,581 posts, read 14,851,208 times
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Another reason to avoid Mortgages Brokers.

This would never happen at a bank. Maybe being declined, but at least you could walk in and raise bloody hell.
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Old 08-31-2009, 02:08 PM
 
Location: West Orange
174 posts, read 602,935 times
Reputation: 36
Quote:
Originally Posted by 17lincoln View Post
hi Guys
we signed a home sale contract (in NJ)and went thru the inspection, attorney review,we even got the mortgage commitment and then just the day before the closing lender declined a loan saying underwriter is not satisfied with the documents we provided. when we spoke to our attorney she is encouraging us to extend the contract and go for an other lender saying that we might loose the down payment money(17000$) if the seller claims for breach of contract. we asked the lender to send us the decline letter for which they said they r going to send us the withdrawal letter.Our attorney says declining letter is the only way to get out of the contract and not the withdrawal letter. we tried to contact the mortgage agent and he doesn't respond to our e-mails and also doesn't pick up our calls.This loan contact was fully through telephone and already 8 working days have passed since they have verbally declined.

My question is whether the withdrawal letter and mortgage decline letter is the same or not???.. and also how to get the decline letter if the mortgage agent is not answering us and how long does the lender take to send out the mortgage decline/withdrawn letter????.Please help
do we have a chance of loosing our down payment monies?there is no loss to the seller because the value of the house has increased and he has put it bk into the market for 20k more.If at all we ask for extension and still we couldnot get a loan ,then do we loose down payment monies..please advice

You didn't have mortgage contingency clause?????
you should always check and make sure that is included in your contract. If you have a good attorney she should look for your best interest and make sure you won't get srewed.
It's not your fault that the bank has rejected your documents and the contingency would protect you against loosing the downpayment money.

That's really not good and, if in fact, you did not have that clause, you will loose the money. Try changing your attorney and saving the deal, finding new lender, do what you can.
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Old 08-31-2009, 02:40 PM
 
106 posts, read 863,844 times
Reputation: 124
A withdrawal letter is not the same as a denial. A seller can accept it, but it's not the same thing.

Are you able to comply with the requirements from underwriting? What are they asking for that you can't provide?

A loan denial letter can be issued in minutes. The broker should be assisting you with this. If they don't respond, get their boss on the phone. If they won't respond, ask your lawyer to make the call. Your problem is going to be if the withdrawal letter looks as if you did not make a good faith effort to get a mortgage.

If you have to, go to another lender (not a broker, an actual lender) and apply for a mortgage asap. If you don't get it, the lender will issue a denial and you can use that. Don't delay.

I've done thousands of closings over the last two decades and if it's not a cash purchase, there is a mortgage contingency clause. Your lawyer has to ask for an extension of the time to get a mortgage if you ran out of time. It's fairly standard to have 30 days to get a mortgage. If your contract says 10 days or something equally absurd, your lawyer would have changed it to 30 days in the rider to the contract.

Hopefully your lawyer struck the liquidated damages clause in the contract. The fact that the house in on the market for more money doesn't count for squat.

P.S. Most lawyers won't substitute at this point because they would be taking on a liability for a matter they had no control over. Work with your current lawyer to resolve this.
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Old 08-31-2009, 02:50 PM
 
Location: NJ
1,422 posts, read 3,290,436 times
Reputation: 1512
what was the lender not happy with? is it something you can supply?
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Old 08-31-2009, 03:08 PM
 
Location: Ridgewood NJ
592 posts, read 2,102,309 times
Reputation: 315
forget the broker, they dont know anything. You need to find out who the underwriter is and which bank is giving(denying) the loan. And call them up until you get them on the phone, then get exactly the reason the loan is denied. Usually all banks use some kind of computer based measurement, "document not sufficient" isnt good enough, find out the exact reason.

Once you know the reason, determine if you can fix it, if not, ask them to issue you a letter of denial. Unfortunately in this environment, whoever kicks and screams the loudest wins.

Your attorney should really be doing all of this and screaming on the phone with the underwriter/lender, unfortunately if you dont have a good attorney it's bit too late now, so you have to do that.

i dont think there is any risk of losing the portion of your downpayment (i am assuming the 5% held in escrow?) unless your attorney really screws it up.

Good luck, and if you can let us know which lender so people can avoid them in the future. It's bs they issue you letter of committment then deny you on the last day, i know it's within their legal means but still crap, it means someone didnt do their job and had a "oh sht" moment in the last minute.
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Old 08-31-2009, 07:35 PM
 
Location: South Jersey
7,780 posts, read 20,471,327 times
Reputation: 2338
one house we put a dp on could not me assessed due to the fact that there were no compariable homes in the area.. thus no mortgage.. and we got our deposit back no issues
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