What benefits would a mortgage company have to delay the closing of a home sale?

Question

We have been trying to purchase a home for the last 5 months. We are being told by the seller's realtor that the seller's mortgage company is not responding to their repeated attempts to finish the closing deal. The seller's realtor is faxing the paperwork 2 times a day, calling and getting the run around, etc and getting nowhere with the company. Two weeks ago the mortgage company did respond and said they were missing a form from the realty company, which has now been completed and still no response. Are there possible reasons why this mortgage company is not responding? What do they have to gain by not following through with the sale?

In response to the posting that said I was being misleading. Yes, this house buying process has had many roadbumps--too many to include in this 1 post w/the amount of space I am allowed. Many of the issues I had previously posted had been resolved (or so I was informed); The Lis Pendens (we were informed by the seller's realtor that it had been negotiated off); the sellers did owe $ over what they accepted on our house offer (we were told that they negotiated w/ their mortgage), possible foreclosure in progress (we were assured by the realty company that they had not received any notice that a foreclosure was in sight). That being said, these last few weeks what we have been told was that it was the lack of communication back from the mortgage co. that was creating the roadblock, not any previous issues. When I posted this question, I was merely trying to ascertain if there was a reason a mortgage co. would delay the closing (possible shady company?); Thanks to those who answered.

Answer 1

You are being lied to for some reason or another. If you have a signed purchase and sale agreement with yours, the seller's and your respective representatives. Then there is nothing the seller's mortgage company can do to stop the transaction. In fact they have nothing to do with it. Once your lender has completed the loan packet and the appraisal, the approval, title searches and inspections are done. Then it's just a matter of drawing doc's. That is when the escrow company will get a hold of the current lien holder on the house and get the appropriate payoff's.

So agree with what the other person said, that perhaps they are trying to hold out for another offer. However if you have a finalized purchase and sales agreement then they are putting themselves at risk for a law suit particularly if you gave them Ernest money with the P&S. It also sounds to me like you are not working with a Realtor who acts as your buying agent which is a huge mistake. Never ever under any circumstances deal with a selling agent without obtaining the services of a realtor to act as your buyers agent.

Answer 2

I am a Mortgage Broker from Washington State. My average loan takes 2-3 weeks to close, sometimes we can close deals in as little as 3-5 days.

Why is it taking 5 months? There is something wrong with either the lender or the Realtor. Lenders will not put off a loan for 5 months, especially when your credit check is only good for 60-90 days.

You should contact an attorney that deals with real estate issues. You could also contact the Attorney Generals Office in your state. They will either send you a form to file a complaint or will direct you to whom you have to file a formal complaint with.

If there are different lenders that you would rather deal with, email me at [e-mail]. The company I represent has over 140 lenders that we work with.

Answer 3

Are you sure the problem is with the Seller's current mortgage company and not a lack of a discharge from an old lender?

Payoff's are normally fairly easy to get from a bank with a signed 3rd party consent form. I order them every day (I do closings) and they take anywhere from 15 minutes to a week to get.

Have you declared time of the essence yet?

*******************************
I just looked at your other posts and apparently a lis pendens was filed against the property, along with a whole host of other issues (foreclosure in process, purchase amount being less than the payoff amount, etc).

Your current question is very misleading. It really isn't very fair or nice of you to waste the time of professionals who took the time to try and help you.

Answer 4

DIRECT ANSWER:
Mortgage Company doesn't benefit at all in delaying a borrower's purchase/sale transaction. The faster they close the deal, the better.

YOUR MAIN ISSUE IN THE DELAY...
based on the info you provided, is TITLE ISSUES. Mortgage Company doesn't have control over Title Companies, specially your Title service provider in this transaction.

Title Company, likewise, do not have control over clearing the lis pendens or foreclosure proceedings. They wait to hear from involved parties, i.e., seller and his/her defaulted mortgage lender's agreement. Seller's lender may still be verifying default figures information.

Defaulted lender will do their due diligence. The default/foreclosure process entail/employ multiple independent service providers, i.e., County Recorder, collection company (if applicable), servicer, lawyer(s), etcetera...

There's a lot of layers involved in a foreclosure proceeding.

Once settlement of this repayment is agreed, another negotiation may rise up; i.e., tie-up pay-off through your escrow transaction.

Your mortgage company (lender) is as frustrated as you are, trust me.

The title issue should have been caught early when the preliminary title report was issued and escrow requesting pay-off demand/statement from seller's current mortgage lender(s) and/or any creditor/lender who filed lis pendens against the property.


If you can't get any answer from your agent or lender - try to get a hold of your escrow officer and/or title officer directly. Ask about the status of resolving this issue.


Meantime, keep updating your documents with your mortgage company, i.e., paystubs, bank statements, copy of rental cancelled checks (front and back) - if applicable; likewise...
----- keep your credit free from inquiries or new open accounts.
----- keep paying your monthly credit/finance obligations.
----- keep depositing on your bank accounts. The more money coming in your account the better for your reserves.


Your loan officer/underwriter/processor may need to keep updating your 1003/loan application based on the updated info you provide.


I hope this will help you. But do seek a 2nd, 3rd - maybe professional legal opinion/counseling for more information and correct valuation of your situation.

Answer 5

Sound like you had a run in with a bad mortgage company. Their job is to be thorough seems like they are lax. What I would do is try to find some one else to approve the loan it should not take 5 months. If you like addtional help Iwould be able to assist you.
Feel free to contact me via the information below.
Jenold Freeman
C.E.O. Justgetaloan.net
[e-mail]
866 530 7300
Dont forget to log onto www.justgetaloan.net Americas home for real estate financing needs. For the best in rates, loan programs and service. Remember no matter what the situation; Can't we all just get a loan?

Answer 6

In most area of the U.S., housing price stopped going up as inventory continues to build up. It is normal to see a correction as a boom that lasted for several years.

If you are investing new money in to real estate, this may not be a good time as the potential return on investment is small compare to the high risk of lower home price.

If you are doing a side way move, meaning you are selling one to buy another one, then it is acceptable.

Nothing is absolute, but housing market is very likely undergoing a correction and this is only the beginning. Some say this would be a soft landing (0 to 10%). Some say a big crashing is coming (10 to 20%).

http://money.cnn.com/2006/08/24/news/economy/newhomes/index.htm
http://money.cnn.com/2006/08/23/news/economy/homesales/index.htm

Answer 7

Generally all the mortgage company does is give the title company a pay-off amount, including pro-rated interest. Not sure why that is such a hard thing to do. Also, the title/escrow company normally deals with them, not a realtor.

The only reason they wouldn't want you to sell is they like they're monthly interest income--but they can't block someone from selling!!

Answer 8

Unless somebody is B.S. ing you? Have you verified what they are telling you? The only advantage for a delay is for a seller to massage another offer.

Answer 9

Sounds like a novice L.O: the deal fell apart and he dosent want to call you