Mortgage question

[physicist82]

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@StartingOver10 wrote:

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@physicist82 wrote:

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@StartingOver10 wrote:

Look for someone else to finance your deal right away. If he is a week into this and you don't have 'loan paperwork' yet, that is a real red flag.

You can run simultaneously for a while but if I were you I would be looking for another lender right now.

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So not having our paperwork yet is a big deal...I knew it. Our financing/appraiser deadline is July 28. Our due diligence deadline is the 21st and we have already had our inspection on our side. He hasn't scheduled an appraiser yet because he said he had to have the final signed contract with the sellers signature on it and then have us sign his paperwork before he could order it. 

It's not like this is an all of the sudden thing either. We put the offer in for this house on June 18 and gave him all that paperwork when the sellers signed it then, but its a short sale and we had to wait for the bank to approve the price and that happened on the 7th.

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I didn't know it was a short sale. The financing is usually started when you get the official letter from the short sale lender approving your purchase. You supply that letter along with the executed contract to your lender and they process the loan. Most short sale lenders only allow 30 days to close it, unless you are getting an FHA loan, then they routinely allow 45 days.

Do you have the official letter from the short sale lender yet? If so, that is what your lender needs to get the paperwork rolling.

BTW, normally the appraisal is ordered immediately when the application is turned in - at least with the lenders I use.

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If you are talking about the HAFA affidivit and the Third Party approval letter then he received both of those on Tues. We received them on Monday but we tried calling him because he was supposed to give us a break down of our payment options Monday morning and he never did so we waited to send them the next day when he called us finally. He got the fully executed contract the next day because we had to wait for the sellers to sign an addendum. He told us on Wed that he would have papers for us to sign by the end of that day. Thurs still no papers, Friday still no papers. We assume corporate doesn't work weekends so not expecting papers. He better have them tomorrow.

We knew we couldn't start any official paperwork until the bank approved the sale but we didn't expect to wait 5 days from credit pull to get a breakdown of our payments so we could choose FHA or Conventional, we didn't expect our numbers to change the next day because he underestimated something and we didn't expect to have to wait a week just for him to get papers for us to sign. He also lives an hr from us so we will have to meet him somewhere to sign them. and he works overnight at another job so we usually can't expect contact from him until after 2pm. Just to add insult to injury I will mention that this guy is our insurance agent as well. 

[StartingOver10]

No, I'm not talking about the HAFA affidavit or the Third Party approval letter.

I am talking about the letter from the lender/servicer that approves the short sale. It is usually a one page letter approving the price, the parties, the terms and the closing date.

It is a very specific letter approving you as the buyer. That is the letter that your lender needs to get this started. Sometimes it takes the short sale lender a few days to get the letter out. Check with your agent. You need a copy of that letter for your lender to get started.

[physicist82]

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@StartingOver10 wrote:

No, I'm not talking about the HAFA affidavit or the Third Party approval letter.

I am talking about the letter from the lender/servicer that approves the short sale. It is usually a one page letter approving the price, the parties, the terms and the closing date.

It is a very specific letter approving you as the buyer. That is the letter that your lender needs to get this started. Sometimes it takes the short sale lender a few days to get the letter out. Check with your agent. You need a copy of that letter for your lender to get started.

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He said the paperwork we sent him was what he needed. He hasn't gotten back to us and said he needs something different. The only thing he said was that since he is with a new brokerage firm and some of them are still learning the system that corporate is printing all the loan paperwork for them instead of letting them do it themselves. 

The "third party approval letter" has this on it. (I am leaving big chunks of stuff that doesn't seem pertinent to this out) That is just what our realtor named it when she saved it as a pdf and sent it to us. 

Subject: Notice of Short Sale Approval for loan xxxxxxxxxxxx

Projected settlement date 09/05/2014

We’re writing to notify you that Wells Fargo Bank, N.A. approves a short sale of the property noted

above. This Notice of Short Sale Approval provides all of the conditions and requirements that must be

met before the short sale transaction can be finalized. Please be sure to read this notice in its entirety

and follow all the steps provided.

Short sale approval requirements

This approval is based on the purchase contract dated 06/18/2014 between SELLERS NAME, the seller(s), and BUYERS NAME, the buyer(s), for a purchase price of $200,000.00. The

terms of our approval and instructions to you and your settlement agent are as follows:

It has a breakdown to the dollar of the amt left on the sellers loan, the price approved, the net price the bank is getting after the loss on the sale, and a breakdown to the dollar of all of the closing costs including the $6000 closing costs for us and the $12000 in realtor commissions (half for ours and half for theirs), plus some other stuff like the prorated taxes, utilities, a relocation reward for the sellers, title and settlement charges etc etc. 

[StartingOver10]

Yes, that is the letter. I just had not heard of it being referred to as a Third Party Approval Letter. But different regions have different names for the same thing

That letter is it! Looks like you are good to go forward.

Does your lender actually fund the loan or are they a broker only?

[physicist82]

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@StartingOver10 wrote:

Yes, that is the letter. I just had not heard of it being referred to as a Third Party Approval Letter. But different regions have different names for the same thing

That letter is it! Looks like you are good to go forward.

Does your lender actually fund the loan or are they a broker only?

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He is a mortgage broker who used to work for a firm that had lenders that sold the mortgages out to 3rd parties. The new company he switched to holds the loans inhouse and doesn't sell them away. He is very happy about that. Whatever it means. 

[StartingOver10]

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@physicist82 wrote:

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@StartingOver10 wrote:

Yes, that is the letter. I just had not heard of it being referred to as a Third Party Approval Letter. But different regions have different names for the same thing

That letter is it! Looks like you are good to go forward.

Does your lender actually fund the loan or are they a broker only?

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He is a mortgage broker who used to work for a firm that had lenders that sold the mortgages out to 3rd parties. The new company he switched to holds the loans inhouse and doesn't sell them away. He is very happy about that. Whatever it means. 

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Normally that is a good thing. Normally it means the loan process is much more smooth. Hopefully this delay can be rectified right away and is attributable to the LO being new with this company. Sounds like you are getting a portfolio loan.

[physicist82]

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@StartingOver10 wrote:

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@physicist82 wrote:

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@StartingOver10 wrote:

Yes, that is the letter. I just had not heard of it being referred to as a Third Party Approval Letter. But different regions have different names for the same thing

That letter is it! Looks like you are good to go forward.

Does your lender actually fund the loan or are they a broker only?

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He is a mortgage broker who used to work for a firm that had lenders that sold the mortgages out to 3rd parties. The new company he switched to holds the loans inhouse and doesn't sell them away. He is very happy about that. Whatever it means. 

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Normally that is a good thing. Normally it means the loan process is much more smooth. Hopefully this delay can be rectified right away and is attributable to the LO being new with this company. Sounds like you are getting a portfolio loan.

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Thanks for all of the responses and advice. I greatly appreciate it. You've been a big help.

[physicist82]

So we ended up having to file an extension. 

We finally got our loan paperwork to sign on 7/15 night. (It took them a week after we signed the real estate contract to get it to us.) We signed it right away after reading it and discussing some of the numbers with our broker. 

7/16 he says the appraiser has been ordered but he doesn't have a date yet. 

Still no word from appraisal but "everything is going according to plan" according to our broker. 

7/21 he finds out that the appraiser is scheduled for 7/22 morning and the report should be at their office by 7/25 or so.

We flip out and ask if everything will be done in time because our financing deadline is 7/28 and he knew that and he told us that everything would get done in time if we stuck with him and he assures that the whole loan will be done by Friday, which is before the deadline on Monday.

7/23 I asked him if there were any updates and if he could tell us which lender will have our loan (since he is a broker).

No response to us but he does respond to our realtor's email saying that he hasn't heard anything from the appraiser yet and his processors are probably all off for the holiday.

7/25 our realtor can't contact him, we haven't heard from him so she tracks down the processors for his brokerage. The lady tells us that there is no way that the loan will be complete today because once the appraisal report comes in we have to give them up to 48 business hrs for u/w to go over it and then we may get conditions by Wed if there are any, then they will have to submit again and come back with possibly more conditions. She tells our realtor that she told our broker on Wed that we would have to file an extension. He never told us.... presumably because he told us on Monday that everything would be 100% done by Friday.

Then today the appraisal comes in and we finally get a text from him saying "the appraisals in and you passed DU so everything is on track". Uh no its not...the whole thing needed to be done by Mon and your processor just told us that won't happen. He also said he needed an updated bank statement to show our downpayment in it. I asked him what I could send him because our statment doesn't cut until the 31st. Have gotten no response. 

To top it off the appraisal cost on the report says 450 and our broker told us it would be 370-375 because a conventional appraisal is cheaper than FHA. 

This is a nightmare!