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Lender Playing Games

Established Contributor

Lender Playing Games

I have been working with a lender here in the DFW area. We were all set for closing or so I thought. I had expressed since the beginning that I wanted the closing costs rolled into the loan. We had the house appraised and I don't believe they gave the appraiser the correct purchase price as the appraiser came back slightly above the contract price of 384k. They now want us to come up with 4k additional within a week. I told the lender on Friday that this wasn't possible as he just told us earlier in the week to put all extra cash towards paying down credit cards so we could get a rate in the 3.5% range. I'm trying to see what are our options here. I could come up with the money but it defeats the point of having a VA loan and no money down. Has anyone ever heard of the builder just throwing in the additional closing costs just to get the deal done? I'm hesistant at this point to change lenders since were so close to the finish line but I told him wife that if nothing is worked out by next week we will just delay the closing until early Oct. and go on the search for another lender and possibly order another appraisal. 


Starting Score:TransUnion: 698 (12 FEB 2010), Equifax: 674 (12 FEB 2010)
Current Score (Lender Pulled):TransUnion: 684 (12 SEP 2016), Equifax: 696 (12 SEP 2016), Experian: 679 (12 SEP 2016)
Goal Score:All scores All scores at least 700+ by December 2017!!

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25 REPLIES
Established Contributor

Re: Lender Playing Games


MrChairman wrote:

I have been working with a lender here in the DFW area. We were all set for closing or so I thought. I had expressed since the beginning that I wanted the closing costs rolled into the loan. We had the house appraised and I don't believe they gave the appraiser the correct purchase price as the appraiser came back slightly above the contract price of 384k. They now want us to come up with 4k additional within a week. I told the lender on Friday that this wasn't possible as he just told us earlier in the week to put all extra cash towards paying down credit cards so we could get a rate in the 3.5% range. I'm trying to see what are our options here. I could come up with the money but it defeats the point of having a VA loan and no money down. Has anyone ever heard of the builder just throwing in the additional closing costs just to get the deal done? I'm hesistant at this point to change lenders since were so close to the finish line but I told him wife that if nothing is worked out by next week we will just delay the closing until early Oct. and go on the search for another lender and possibly order another appraisal. 


That would be illegal.

 

1. Your lender should have been clear with you from the beginning that the appraisal may come back lower than the purchase price and that they have no say in the matter.

2. Even if the appraisal is higher than the purchase price, VA loan only goes to 100% LTV. The LTV is calculated based on the lower of the purchase price or appraisal. If the appraisal was higher, then you could have increased your purchase price and the seller could have made seller concessions. But there is no guarantee that the seller would agree to that.

3. I've seen many sellers/builders make concessions to get the deal done. If you explain the situation, it might be possible.

 

BK DC 4/9/2018
FICO 08 (4/9/2018): EQ 647 EX 609 TU 620
Message 2 of 26
Moderator

Re: Lender Playing Games

For the closing costs to be rolled into the mortgage there are only two ways for that to happen:

 

  1. Contract has the seller pay $X toward your closing costs and prepaid expenses
  2. Lender increases the interest rate to get the funds to pay some or all of your closing costs. You then are paying a premium par rate which is the opposite of what you want to do (according to your original post).

Do you have the seller paying your costs in the contract? 

 

Go back to the builder and see what they will do now (if anything). They want to close as badly as you do but be careful here. This is more difficult to do if the price of the home has increased beyond your contract price as it would then pay for the builder to put it back on the market if you have a strong sellers market. 

Message 3 of 26
Established Contributor

Re: Lender Playing Games

Just an update to my situation:

 

We were supposed to close today but couldn't because we didn't have the Closing Disclosures by Monday so it wouldn't have been enough for the 3 day waiting period. Mind you, this closing was scheduled WEEKS out so more than enough time for the mortgage guys to do what they needed to do. We moved the closing to Monday and yesterday we didn't recieve any disclosures so now were at Tuesday at the earliest IF we get the disclosures today. I just fired off an e-mail to my lender. If I don't get docs today I will be shopping for a new lender Monday. We had a slight issue with who's going to pay closing costs but that was resolved in 2 days. During that time we got a conditional approval from the under writer with very simple conditions that were met the next day. I don't understand why it's taken an additional 4 days to get a clear to close. We haven't even locked an interest rate yet!


Starting Score:TransUnion: 698 (12 FEB 2010), Equifax: 674 (12 FEB 2010)
Current Score (Lender Pulled):TransUnion: 684 (12 SEP 2016), Equifax: 696 (12 SEP 2016), Experian: 679 (12 SEP 2016)
Goal Score:All scores All scores at least 700+ by December 2017!!

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Message 4 of 26
Valued Contributor

Re: Lender Playing Games

How did you resolve the closing cost issue?
Message 5 of 26
Established Contributor

Re: Lender Playing Games

Realtor contributed 4k from his comission.


Starting Score:TransUnion: 698 (12 FEB 2010), Equifax: 674 (12 FEB 2010)
Current Score (Lender Pulled):TransUnion: 684 (12 SEP 2016), Equifax: 696 (12 SEP 2016), Experian: 679 (12 SEP 2016)
Goal Score:All scores All scores at least 700+ by December 2017!!

Take the FICO Fitness Challenge
Message 6 of 26
Established Contributor

Re: Lender Playing Games


MrChairman wrote:

Just an update to my situation:

 

We were supposed to close today but couldn't because we didn't have the Closing Disclosures by Monday so it wouldn't have been enough for the 3 day waiting period. Mind you, this closing was scheduled WEEKS out so more than enough time for the mortgage guys to do what they needed to do. We moved the closing to Monday and yesterday we didn't recieve any disclosures so now were at Tuesday at the earliest IF we get the disclosures today. I just fired off an e-mail to my lender. If I don't get docs today I will be shopping for a new lender Monday. We had a slight issue with who's going to pay closing costs but that was resolved in 2 days. During that time we got a conditional approval from the under writer with very simple conditions that were met the next day. I don't understand why it's taken an additional 4 days to get a clear to close. We haven't even locked an interest rate yet!

Hi MrChairman,
The lender cannot send out the final Closing Disclosure (required to be sent at least 3 days prior to closing) until they send out the Loan Estimate once the rate is locked. In addition to that, the final CD cannot be sent out the same day as the LE so you would be looking at 4 days before you could close. You may want to go ahead and pull the trigger on switching lenders now so you can get your rate locked in & get things going.

 

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 7 of 26
Established Contributor

Re: Lender Playing Games

Apparently DW's mid score is 623. He says we need 11 points to get in the 640 range in order to qualify for a rate in the 3.x range. We paid the accounts off almosty 3 weeks ago and the lender did a rapid rescore. Still haven't updated he says on the CR's. He said with the 623 our rate would be around 4.6% which is almost an extra $250 month. He said we could still close with this rate but he wouldn't recommend it. I just sent him an e-mail stating that if we can't get this rate thing under control, how much would it cost to buy down the rate. Will update when I get a response.


Starting Score:TransUnion: 698 (12 FEB 2010), Equifax: 674 (12 FEB 2010)
Current Score (Lender Pulled):TransUnion: 684 (12 SEP 2016), Equifax: 696 (12 SEP 2016), Experian: 679 (12 SEP 2016)
Goal Score:All scores All scores at least 700+ by December 2017!!

Take the FICO Fitness Challenge
Message 8 of 26
Established Contributor

Re: Lender Playing Games


MrChairman wrote:

Apparently DW's mid score is 623. He says we need 11 points to get in the 640 range in order to qualify for a rate in the 3.x range. We paid the accounts off almosty 3 weeks ago and the lender did a rapid rescore. Still haven't updated he says on the CR's. He said with the 623 our rate would be around 4.6% which is almost an extra $250 month. He said we could still close with this rate but he wouldn't recommend it. I just sent him an e-mail stating that if we can't get this rate thing under control, how much would it cost to buy down the rate. Will update when I get a response.


 Hi MrChairman,

 

A couple of things.

 

1) The only reason your rate would 4.6% would be if the lender was going to cover a lot of your closing costs even with a 623 score.

 

2) & this an even bigger issue. The lender DID NOT order a rapid rescore like they told you. They had you pay down thos cards & now they're waiting for the balances to update on their own. A rapid rescore would have had the balances updated in 3-5 business days. 

Like I said before, it's time drop the lender & start working with someone that's not going to lie to you & jerk you around.

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 9 of 26
Established Contributor

Re: Lender Playing Games

What kind of rate should we be expecting with a 623 score?


Starting Score:TransUnion: 698 (12 FEB 2010), Equifax: 674 (12 FEB 2010)
Current Score (Lender Pulled):TransUnion: 684 (12 SEP 2016), Equifax: 696 (12 SEP 2016), Experian: 679 (12 SEP 2016)
Goal Score:All scores All scores at least 700+ by December 2017!!

Take the FICO Fitness Challenge
Message 10 of 26