How Do I cancel out of Escrow??

Question

We signed for escrow about 30 hrs ago. Our Lender changed the numbers on us, numerous times. We kept on accepting changes a little bit a time but failed to look at the whole picture. Suddendly, we cannot afford the new home. Our Earnest money is $5k that we are ok with loosing. We are just worried that they may sue us for anything? can they? How do I get out of Escrow.? FYI - We dont have realtors. HELP... thank you so much!

Answer 1

I wish you would have asked this question 15 hours ago, you are now likely going to have to wait until monday to reach the escrow company and halt this thing temporarily. It is possible that the seller hasnt signed yet, or if did this afternoon that recording hasnt occurred yet. You wont know until monday am. You can if your deal hasn't recorded yet so funding is still pending fix this mess. The lender can redraw docs if the seller will allow for an extension of closing date. There will likely be a slight cost but less than that of your deposit you are admittedly ok with loosing. Call the lender tomorrow and DEMAND that they either reprice your loan to par rate and show you the rate sheet, or you will sue them. This is a federal compliance thing they are likely of violating. If on your HUD-1 there is a YSP or POC down by the bottom that figure is lender rebate paid to your broker for pricing you up. Your qualifying at par interest rate should be 1/2 to 1% or more lower. At the lower rate your payment should be much more affordable. The wholesaler can redraw docs within a few hours but will need a new broker demand from your lender. Make the office manager write it up for you and have them also drop 3/4 point from their origination fee as well. Some in the loan business are shameful at best and deserve to lose their commission from time to time. They are greedy and the only lessons they learn are when they lose money themselves. You can e mail me if you like. I will give you my cell number and walk you through the steps. I wont do your loan and will not accept a fee for helping you. I do this for people all the time however. Btw, this would likely have happened even if you had a real estate agent. They often are quite unknowledgable about the financing side.

Answer 2

I'm not sure exactly what you mean by "Escrow" because the term is used differently in different states. If you are simply talking about canceling out of the purchase contract (and have your $5k earnest money "in escrow"), then the purchase contract should give you the provisions for canceling (usually you just forfeit your earnest money, but you want to check for special language). If you do not have a contract, then unless your state allows for an oral contract in this case, I don't think they can successfully sue you. If you're talking about canceling after you and the seller have already signed the closing documents (deed, note, mortgage, and the other inch-thick stack), then you have little or no recourse. There is no three day right of rescission with a purchase and the money is disbursed immediately. If you are still in the loan processing stage (which is when numbers tend to change because the lender gets the appraisal back along with the exact title fees), then you probably do not have any obligation to the lender (but your application fee is lost) and you would just need to worry about the provision of any contract that you have with the seller. People change their mind during the loan processing stage all the time. Most purchase contracts have some sort of "out" in case the buyer's loan doesn't go through, etc. Good luck!

Answer 3

Were they your final loan documents? Unfortunately, I don't think you can cancel if that is the case. You should have had a Realtor to tell you these things. If they were just the escrow instructions you can still get out. Escrow will hold the deposit until both parties agree in writing (escrow's form with signatures) to who gets the deposit or how it is to be split. New home builders probably won't sue you, but will definitely keep the deposit. You should turn around and sue the lender though if they really did change it drastically. However, if the changes were unavoidable with the normal market rate changes or circumstance changes with regards to the approval and the lender fully disclosed the new rates and/or fees, then the lender is not at fault either.

Answer 4

Can you still qualify for the loan. If you do not qualify then you can with draw. I think your mortgage payement should be 33% of your income. If it makes it then you have no choice just ask the owner that what the cost would be to pull out. No body can sue you , unless you outbid somebody

Answer 5

You really should have an agent. Why not? They are no cost to you. Who wrote the contract? Is there a finance contingency? If you fail to get financing then the contract is void and your deposit is refunded. Try to get a BUYER Agent to represent you but it may be difficult at this point since they didn't start the transaction.
Good Luck