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Financing contingency expired after 30 days?!

CreditInspired
Super Contributor

Re: Financing contingency expired after 30 days?!


@Readyformyhome wrote:
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.

If what you said is even remotely true, then you should be able to sue the Realtor. I would be calling that Realtor's Broker yesterday and talk to them about the subpar service you are receiving. I am truly appalled that you are so involved with the intricacies of the contract instead of the Realtor. The Realtor is making a commission to give you the best possible service he/she can. I was a Realtor for 10 years and it's no way I would not know what is going on with every aspect of the contract or the builder's idiosyncracies. So if the Realtor can't figure it out, maybe the Broker can. 


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Message 11 of 14
Readyformyhome
Established Contributor

Re: Financing contingency expired after 30 days?!

Theoretically, my loan is approved, but it will still have to go through final underwriting. So I know that this  may be stress for no reason, but things could happen between now and then. What if, god forbid, I lost my job? It's just super scary to have this hanging over me until December.

 

The realtor is a friend... that can be tricky, I guess.

 

Anyone dealing with Lennar, beware. This was hidden in a Rider buried in 72 pages of crap in my purchase and sale.

 

1. "Mortgage Contingency Period" shall mean (i) thirty (30) days from the Effective Date of the Agreement, or (ii)
sixty (60) days from the date of Seller's notice to reapply for mortgage financing.


2. Mortgage Contingency. Notwithstanding any provision in the Agreement to the contrary, if Buyer is applying
for a loan in excess of eighty percent (80%) of the Total Purchase Price, and the Property is not being acquired as a
primary residence, Buyer agrees to accept a loan equal to eighty percent (80%) of the Total Purchase Price if the
institutional lender considering Buyer's loan application will not approve a loan in excess of eighty percent (80%) of
the Total Purchase Price. Unless Buyer shall have notified Seller otherwise in writing within the Mortgage
Contingency Period, Buyer shall be conclusively presumed to have obtained the loan commitment or agreed to
purchase the Property without mortgage financing. If Buyer does timely notify Seller within the Mortgage
Contingency Period that he/she failed to obtain a loan commitment, Seller may require Buyer to immediately reapply
for a mortgage loan with another lending institution designated by Seller. If Buyer then fails to obtain a loan
commitment within the second Mortgage Contingency Period, either Buyer or Seller shall have the right to terminate
the Agreement whereupon the Deposit shall be returned to Buyer, and thereupon the parties hereto shall be released
from all liability hereunder without any further acts by either party.

 

So, basically, if you can't get financing within that first 30 days, you're fine... they can make you re-apply elsewhere but ultimately you're okay. But if you can't get financing later on down the line, when your house is ACTUALLY being close to being done, you're SOL. I also love that they try to force you to do an 80% loan even if you applied for 97%. **bleep**. Super predatory and should've been caught.

FICO8: Low 700s. FICO9: Mid 700s. Goal: 800 club
Message 12 of 14
JVille
Valued Contributor

Re: Financing contingency expired after 30 days?!

Yes by your Realtor who was acting as your agent!
Message 13 of 14
Readyformyhome
Established Contributor

Re: Financing contingency expired after 30 days?!

I have to say, I’ve really been stressed since learning this. It would be bad enough if something fell through on the house I’ve been under contract on since APRIL. But if I lose it AND lose my 21k, I just don’t even know what I’ll do. I’ll basically not be able to buy for another year because it’ll take that long to save another down payment.

I live in a 1200 sq ft house with 4 kids, two dogs, and NO space. My kitchen is a hallway. I’ve been sacrificing everything to get us into a bigger home... and if this deal falls through, I’m screwed. My stress level is off the charts.
FICO8: Low 700s. FICO9: Mid 700s. Goal: 800 club
Message 14 of 14
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