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So if the loan has been approved but hasn't funded on the contingency removal deadline, you won't release the contingency? Here the seller is likely to cancel If you don't release on time. The buyer is counting on the mortgage broker to get the loan approved before the deadline.
Sellers here (in most cases) don't seem to be eager to cancel 30 days in if the written commitment isn't produced and it's rare for them to ask for removal of contingency in the absence of the written commitment. I'm OK with the buyer making the decision but I'm a little wary of trusting lenders to do what they day they will and when.
I've had deals come out of final underwriting mere days from closing, I mean literally 1-2 business days, close enough to jeopardize the the closing date.
In my last two purchases, a simultaneous closing of two properties with the same lender, underwriting came back and told me I had too many credit report inquiries, and to explain it. I had 6 credit report inquiries and ALL OF THEM were from the lender I was working with! That postponed their final approval 24 hours.
In my imagination I see underwriters as a bunch of old women wearing clown hats working in a rubber room. I imagine it is soundproofed so the rest of the investment company can't hear the cackles coming out of them.
At one point I joked with my confidant/buddy at the loan company that I was going to send the underwriters the following:
Quote:
I, ______________, hereby certify that you are reading the document that you are holding in your hands.
____signed____
For the record, your deal isn't funded until AFTER you have signed all the closing documents, until AFTER the signed documents are sent from the escrow company to the lender, until AFTER the lender has given all the documents the evil eye, and finally decide they have no legitimate reason to deny funding. And ONLY THEN do they wire the money to the escrow/title company that constitutes that your closing is funded.
So if the loan has been approved but hasn't funded on the contingency removal deadline, you won't release the contingency? Here the seller is likely to cancel If you don't release on time. The buyer is counting on the mortgage broker to get the loan approved before the deadline.
New Guy Question....Why would a buyer "release" (same as cancel ?) any contingency in the contract ?
NinaN's reply almost sounds like it is a requirement for the purchase to go through.
Dazed and Confused
Arizona
New Guy Question....Why would a buyer "release" (same as cancel ?) any contingency in the contract ?
NinaN's reply almost sounds like it is a requirement for the purchase to go through.
Dazed and Confused
Arizona
I'll take a stab at this. In Florida, the loan contingency is actually a "loan commitment" contingency. Our contract reads: "This Contract is contingent upon Buyer obtaining a written loan commitment..."
If the buyer does not deliver a written loan commitment or waive the contingency within the specified period (30 days is the default if not otherwise specified), the seller may cancel the contract and buyer gets deposit back. This is a very real possibility in a hot market or if the seller is holding a backup contract. As long as the buyer is confident of the lender closing the loan, he needs to waive the contingency, in lieu of a written commitment, if he's worried the seller might cancel if he doesn't. Waiving the contingency doesn't render the deposit non-refundable if the property doesn't appraise, btw.
Our contract reads:"If Buyer does not deliver written notice to Seller of receipt of Loan Commitment or written waiver of this financing contingency, then after Loan Commitment Date Seller may terminate this Contract by delivering written notice to Buyer and the Deposit shall be refunded to Buyer, thereby releasing Buyer and Seller from all further obligations under this Contract."
The reason many seller's agents don't ask for the written commitment at the deadline is that they don't want to remind a possibly nervous buyer that there is an out to the contract including a return of buyer's deposit. They'd rather the buyers keep pushing to get the loan approved and the sale closed.
On another note, our contract gives specific permission for the buyer's lender to disclose loan status and progress to the seller and her broker.
From the contract:"Buyer shall keep Seller and Broker fully informed about the status of mortgage loan application and Loan Commitment and authorizes Buyer's mortgage broker and Buyer's lender to disclose such status and progress to Seller and Broker."
I'll take a stab at this. In Florida, the loan contingency is actually a "loan commitment" contingency. Our contract reads: "This Contract is contingent upon Buyer obtaining a written loan commitment..."
If the buyer does not deliver a written loan commitment or waive the contingency within the specified period (30 days is the default if not otherwise specified), the seller may cancel the contract and buyer gets deposit back.
^^^^^ Yeah, I think that's the best relevant reply to the OP's situation.
I'll take a stab at this. In Florida, the loan contingency is actually a "loan commitment" contingency. Our contract reads: "This Contract is contingent upon Buyer obtaining a written loan commitment..."
If the buyer does not deliver a written loan commitment or waive the contingency within the specified period (30 days is the default if not otherwise specified), the seller may cancel the contract and buyer gets deposit back. As long as the buyer is confident of the lender closing the loan, he needs to waive the contingency, in lieu of a written commitment, if he's worried the seller might cancel if he doesn't. Waiving the contingency doesn't render the deposit non-refundable if the property doesn't appraise, btw.
Our contract reads:"If Buyer does not deliver written notice to Seller of receipt of Loan Commitment or written waiver of this financing contingency, then after Loan Commitment Date Seller may terminate this Contract by delivering written notice to Buyer and the Deposit shall be refunded to Buyer, thereby releasing Buyer and Seller from all further obligations under this Contract."
The Arizona Purchase Contract calls the "written loan commitment" a "loan approval without Prior To Document conditions" (I am assuming these two are the same). The only time constraint given is "no later that 3 days prior to COE"
There is no mention of a written waiver of financing contingency anywhere in the Purchase Contract. So in the Arizona purchase contract there is no opportunity to wave the financing contingency.
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