House #6: Underwriting Misery

May 28, 2009 · 2 comments

We’ve had The Red Garage House under contract for nearly 6 weeks now, and while we were happy that the buyer’s financing was dragging on (we couldn’t close on this one until May 14 anyway due to FHA restrictions), we didn’t want it to drag on this long…

The contract expires this weekend, and the plan was to close by the end of this week. Unfortunately, that hasn’t happened. This is another case of a mortgage broker being uncommunicative, and ultimately risking the deal for both us and the buyer.

According to the broker, the loan has been in FHA underwriting for a couple weeks now. While that’s possible, I suspect the broker has been taking his time getting all the paperwork in, and getting all the information that the underwriters need to clear the loan.

On the bright side, I finally cornered the broker today (on the rare occasion that he returned a call), and let him know that if we didn’t get some definitive information soon, we’d just let the contract terminate this weekend, and all the work he’s put into the loan would be wasted. He made some phone calls, and it sounds like we should have some more information from the underwriters tomorrow — whether that info is that we’re cleared to close or whether it be that we still need more time, I don’t know.

Either way, it was enough reassurance that we’re willing to extend this contract one more week, and hopefully get this one to the closing table before next Friday. We actually feel horrible for the buyer, as he and his fiancee need to be out of their apartment by Tuesday, and don’t have anywhere to live until they get into this house.

I’ll keep you updated…

2 responses to “House #6: Underwriting Misery”

  1. Don Hines says:

    I just closed one last Friday that drug on forever. I agreed to extend the closing twice. The lady that bought it knew every hand out and assistance there is which caused too much beuacracy. Our main problem was inspections. While I satisfied the first one for her lender, the appraiser (FHA loan) would not do his job because he couldn’t flush the toilets while the plumber was replacing the water service to the house. Then he provided his punch list. The buyer and I had to negotiate and agree to items on his list. Then came the ADDI inspection. ADDI is a government down payment assistance program in existance since 2003. That inspector came up with yet another punch list. I bawked on this one and told the buyer’s realtor that had I’d known ADDI was involved I would not have agreed to discount the property and provide assistance with the closing cost. The buyer satisfied this punch list after I explained where the new homes are sold. Then the bank drug there feet for a week after ADDI had drug theirs. The title company could not give me a definete date until about an hour before we actually closed. All of this beuacracy extended the process about 3 weeks.
    I am not giving you all of the details; I promised my wife and my pastor I would try to refrain from that language again.

  2. J Scott says:

    Don –

    I hate it when things like that happen, and I certainly feel your pain. Sounds like yours eventually got to the closing table, and that’s the important thing!

    Every sold house is a good thing, even if it doesn’t feel like that during the agony leading up to the close…


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