I secured a deal for a home with the owner and got a signed contract a month ago. For sale by owner deal. Secured financing at 95%, with 5 % down. Did financing through a broker, and got a locked in deal with countrywide over 3 weeks ago. All is well, appraised for 100K over what I have contract for. I have renters moving into my house in 36 hours, utilities transferred etc etc.

Got call from mortgage broker that Fed determined the couty I live in and am purchasing iwas put on list days ago as a declining housing market area. As result they will not send finance package to closing agent. Mortgage company states they will only send package if I put another 5% down... I don't have the extra 5% which is $15,750! Im supposed to pull this out of my butt in less than 36 hours correct?

Do I have any right to any legal action. Im pissed off and feel someone other than me should suffer as result of this. Fact is if I don't get this house, my wife and I will be homeless as I can't bring myself to tell the renters for my existing house they can't move in.


Please any legal advice is appretiated.

House is is Walton county Florida, in town Santa Rosa Beach next to Destin.

Thanks for any reputable replies.

Scott

Read your contract. I'm sure it says pending approval from whomever. But your contract will spell out your rights in this area.

Yes, a mortgage is not a done deal till all the papers are signed and the money is in escrow. I see loans fall though a few days before all the time.

But as Scott said, it is all in the contracts you have ( if any) with the mortgage company.

Quote:

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Originally Posted by 30-A rider

I secured a deal for a home with the owner and got a signed contract a month ago. For sale by owner deal. Secured financing at 95%, with 5 % down. Did financing through a broker, and got a locked in deal with countrywide over 3 weeks ago. All is well, appraised for 100K over what I have contract for. I have renters moving into my house in 36 hours, utilities transferred etc etc.

Got call from mortgage broker that Fed determined the couty I live in and am purchasing iwas put on list days ago as a declining housing market area. as result they will not send finance package to closing agent. Mortgage company states they will only send package if I put another 5% down...I dont have the extra 5% which is $15,750! Im suppossed to pull this out of my butt in less than 36 hours correct?

Do I have any right to any legal action. Im pissed off and feel someone other than me should suffer as result of this. Fact is if I dont get this house, my wife and I will be homeless as I can't bring myself to tell the renters for my existing house they can't move in.


Please any legal advice is appretiated.

House is is Walton county Florida, in town Santa Rosa Beach next to Destin.

Thanks for any reputable replies.

Scott

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Good afternoon Scott,
I understand your frustration and I am so sorry you suddenly have to deal with this stress. I need to explain a couple of things to you so that you understand. Your broker/loan officer should have done this and I'm sorry they didn't.

1.) The sales contract you speak of is a legal binding contract between you and the seller. It is not a contract between you and the lender. In that sales contract it (protects) the seller from you just deciding one day you do not want the house. However, in that sales contract, on the last page, above your signature, will be a box checked. The box will say Finance Contingency. What that means is that for whatever reason your loan falls through you will not be legally bound to that sales contract. However, if you gave them a deposit to follow the contract that might be tough to get back. A lawyer will have to advice you in regards to that.

2.) I am very familiar with the market conditions in Florida and the Santa Rosa area. I also have family that live in Milton, Pensacola and Pace. I can tell you that area, along with a lot of areas are in what's called, 'Declining Markets' So I'm not sure as to why the broker waited until the final hour. However, pointing the finger at who'd fault it is doesn't help you right now. Understand that when that property was appraised if it were to come in at the $100,000 more than purchase, that does not help you with the type of loan you are getting into. That helps you if you turn around in 90/120 days and refinance it but it does not on the purchase. So when they ask you for another 5% that means the house appraised at the purchase price, which is common practice. I only share that so that you understand that you have a wonderful property, which a great deal it sounds like, but you have to get through the purchase first. The mortgage company wants you to close believe me, they either didn't know how to package a loan for Countrywide, or they didn't do their homework and found themselves up a creek with no paddle.

3.) As frustrating as it is you have to let that go for now. Pick up being angry with them after you live in your new home. As Fr_Chuck said it's not a done deal until the paperwork, and wire transfer takes place. The key now is to obtain financing and you are running out of time. So let me help you with loan possibilities as you are running out of time. I put some ideas below, I know you will not know them by name but this mortgage company will. I suggest finding a mortgage Lender, vs a broker because they will be much faster and can do everything in house. You can still close if you act fast. Okay? I don't know your credit situation so I am going to throw out a wider net. Depending on what you do for a living I want you to try and get a loan called My Community (Fannie Mae) or Home Possible (Freddie Mac) They will allow to purchase up to a 100% value, have low MI and great rates! Try that first, go from there.

If you need more suggestions send me an e-mail. I hate to see people in your position so we need to get you out of this and into your home. You need to get yourself back into the drivers seat and in control of the financing here. We can all help you but you need to keep your head up and do not panic.

Suggestions...

1.) My Community (Fannie Mae) or Home Possible (Freddie Mac) Countrywide offers this loan it's available in your area but you have to meet a few guidelines. What you do for a living is huge on these two types of loan.

Borrower Eligibility Requirements
~ Teacher
~ A certified teacher or administrator in an education agency.
~ An employee of a post-secondary educational institution.
~ Public Safety Employee
~ An employee of a law enforcement agency or fire department that is administered by an agency or subdivision of a state or local government.
~ A sworn law enforcement officer responsible for crime
detection and prevention, law enforcement, or criminal
incarceration.
~ A sworn member of a fire department involved in fire suppression or prevention, emergency medical response, hazardous materials response, or management or response
to terrorism.
~ Health Care Worker A certified, accredited, or licensed health care worker who is any
of the following:
~ A medical resident or fellow.
~ A nurse, nursing assistant, or physician’s assistant.
~ A pharmacist or pharmacy technician.
~ A medical technician or technologist.
~ A therapist.
~ Military Personnel • Members of the U.S. Armed Forces who are on full-time active duty.
~ Members of a reserve component of the U.S. Armed Forces.
~ Former members of the U.S. Armed Forces or a reserve component of the U.S. Armed Forces who have received an honorable discharge and have been separated or retired from either active duty or a reserve component for no more than
two years at the time of the mortgage loan application.

It's a broad net but that is the skinny on it. I realize this e-mail is turning into a novel so if you have more questions you can e-mail me and I can go over guidelines, other options (and you are in control here) there are a lot of programs to help you.

The contract I was referring to is the deal with the lender. Not the deal with the seller. As Life points out that has no bearing on the mortgage. But you state you got a commitment from the lender. So that's what you need to look at.

Thanks to all who have educated me. To clear some things up, and let you know where Im at, and why I am so frustrated.

I went with a broker to attempt to find good rates basically.

My credit score averaged at 795 between all 3 credit agencies.; and as result I qualified with regards to mortgage without having to show proof of income.

Im a Chiropractic physician; and own my own business.

The home I am trying to purchase appraised for over $100K more than I am purchasing it for

I do have a clause in my sales contract that if for any reason the deal falls through I get all my $$$$ back. This is a plus!

I was told that the reason this all happened was because as of yesterday the fed detrmined Walton county to be high risk. As result most lenders automatically change their requirements for loans in that area and unfortunately my county was added to this list 48-72 before I was about to close. I was under the impression once I locked in my rate and all paper work was off to the mortgage company, approved and was given a final figure I had to go to closing with that the mortgage company was obligated as well to provide. My assumption was obviously wrong.

Thanks for the advice. Any new ifo I will let the board know.