I have am purchasing a home and escrow closes in 3 days. I signed the loan documents and have paid my closing costs. Today I get a phone call stating that the bank no longer offers the loan that I was to recieve. I had already signed the documents and had them noterized. Now they are saying that I no longer have a loan. My lender is a private lender but is stating that the bank no longer carries this type loan. I am not sure what my rights are. Can a lender retract a loan due to no longer carrying that paticular loan after the documents have been signed and the funds have been released. Somebody please help escrow is due to close on Monday.
When can a home loan lender back out of a loan?
06
Mar
Mary B
March 6, 2010 at 3:06 pm
Yes. What has happened is that the loan product that they were selling you was backed by a particular investor (which gave them the ability to offer it and fund it), and apparently the investor has either stopped doing business with the bank, or the investor has dropped the loan program.
My guess, is that they lost the investor, because when a loan program is being discontinued, I have never seen a situation where a prior notice is not given to give loans in the pipeline a chance to close. I would call and ask to speak to the Operations Manager that supervises underwriting (NOT your loan officer) and demand for a thorough and complete explanation.
They should be offering you an alternative loan and push it through…like yesterday.
PS: If my post sounds confusing…think of it this way…lets say you had a car dealership that sold nissans, toyotas, and bmw’s. If the company that sold them nissans decides not to make nissans anymore, then they can’t sell them, OR if the maker of nissans decides not to do business with the dealership any longer.
I wish you luck…what a horrible mess!
Jason
March 6, 2010 at 3:53 pm
Recently, Lenders have done away with 2/28 and 3/27 mortgages. Most changed wednesday. They are now doing 5/25’s If your loan was already in the pipeline, It would remain the same or switch to a 5/25 for free. Go to your lenders office. Ask for the Branch Manager. If your using some large company in another state, Start Calling now. Ask for a manager. Don’t talk to your loan officer first. Blind side them. This will tilt the table in your direction. Your loan should be in the pipeline and already approved if your going to close on Monday. If it’s not in the pipeline, your probably screwed.
AnOrdinaryGuy
March 6, 2010 at 4:16 pm
I’m not sure if they can or not. At the very least, their excuse ought to be in their contract with you. If it’s not, they might be stuck. The first thing you should do is read the forms they gave you when you signed up, and the next thing you should do is to contact the state agency that regulates mortgage lenders to find out your rights.