Financing contingency expired after 30 days?!

[Anonymous]

The notice to close paperwork I got tonight said that the mortgage contingency has lapsed. Apparently the initial P&S agreement said that I only have 30 days to secure financing before the contingency expires.

So apparently I’ve put $21,000 into earnest money with no guarantee if my loan goes south. The kicker? We signed in April. Close in December. It’s impossible to secure final mortgage approval within 30 days and they know it.

Stress level: infinite.

[CreditInspired]

All you have to do is ask Seller for an extension. This happens often. And yes, it is possible to get financing approval in less than 30 days. I got it in 21 days. It all depends on everything getting done in a timely manner and no hiccups.

So you’re going to be okay. And your contract should be contingent on your getting financing. No financing = EMD returned. Hopefully, this relieves your stress.

GL2U

[JVille]

100% agree your Realtor needs to write up and extension and this happens all ALL the time!

[Anonymous]

No, I mean the contingency itself expired after 30 days. The contract explicitly states that if I did not have my financing fully approved after 30 days, if I then lose financing, I lose my earnest money deposit. There is no longer a contingency for financing.

[Anonymous]

And it was impossible to 100% guarantee my financing within 30 days because we signed in April and will close in December. It's a truly terrible, predatory contract. 

I shouldn't run into any issues as it turns out they were calculating my DTI based on my income before my raise, and no bonus, but it's always possible we will run into an issue and then I'm completely SOL by the terms of the contract.

[CreditInspired]

---

@Anonymous wrote:
No, I mean the contingency itself expired after 30 days. The contract explicitly states that if I did not have my financing fully approved after 30 days, if I then lose financing, I lose my earnest money deposit. There is no longer a contingency for financing.

---

Do you have a Realtor? Because if you do, it's no way you should have signed anything where you would lose your EMD if you couldnt get financing. 

I just re-read what you typed. Is that after 30 days or within 30 days? Can you type the exact wording from the contract. 

[JVille]

1. DO YOU HAVE A REALTOR? (Yes I yelling)
2. Do you have a contract with a builder to build a house?
3. Is the house done? Or still under construction?
4. Did you just recieve your loan approval ?
5. Did the UW gave some conditions?
6. What EXACTLY are the conditions?

Please answer these questions. The fact that you had 30 days to obtain loan approval is normal. And while it took longer, it sounds like your loan is approved and the UW has asked for an Extension because your dates have expired.
Please answer the questions above.... the answers will help us to help you. Take a deep breath it’s going to be ok.

[Anonymous]

I have a realtor... she was shocked when I showed her the latest contract and talked to the builder, who then pointed her to the portion of the 72 pages of the original P&S that said the mortgage financing contingency expired after 30 days.

Here’s the timeline. Went into contract in late April (4/28). New construction that at the time was slated for end of October. It bumped to late November immediately and yesterday we got the firm notice of closing for 12/6.

I was pre-approved with the builder’s preferred lender before making the offer. They do upfront UW so within a month after the offer (5/21), I received notice of conditional approval. It took about 3 weeks to get the conditions, which I’ve been able to meet other than ones that require an actual built home (appraisal, etc).

So at this point, it seems that my loan will close in December but I’m horrified that this contract says my financing contingency has lapsed AND if I’m not approved, I am responsible for purchasing the home without financing. Which of course no one can do for a 600k home, but if this falls through not only do I lose my 21k EMD, I could get sued for breach of contract.

This is a complete nightmare.

[JVille]

No it’s not, your loan is approved.... yes? They will update your file just before closing. You’ll be in for Christmas, take a deep breath. Per your own time line you met their loan approval deadline. This is how all the big builders work.

[JVille]

Interesting your Agent allowed you to sign that contract, shame on them.