Back in April I wrote a blog about a loan that I was doing for a young man that was purchasing a Bank Foreclosure. Well I am happy to say that the loan finally Closed this morning. It took a 110 days, and a lot of frustration, but it finally Closed.
When I was Pre-Approving this young man for this loan I tried to prepare him for the frustrations that I new he was going to encounter along the way, and the Realtor also did the same. But what this Borrower has gone through in the last 110 days was beyond what either of us could have prepared him for.
As I wrote back in the blog in April this transaction was a difficult one from day one. Before the bank even agreed to accept the offer, the Realtor representing the bank contacted my Borrower's Realtor and proceeded to inform her that the bank would not accept his offer because it was a VA (this was a backed loan (this was a CHFA/VA Loan), and that VA would not allow for the transfer of title within six months of the bank foreclosing on the property (flip rules). This Realtor went on to tell her that he had to go FHA or Conventional in order for them to accept the offer. My Borrower's Realtor contacted me right away to inform me of this. and to ask me to Pre-Qualify him for a FHA or Conventional Loan. I told her that I would be happy to do that, but that this bank and Realtor were wrong about that being a VA condition. The Borrower' Realtor asked me to call the other Realtor and make him aware of this.
After three days of going back and forth, and getting him a statement from a VA Underwriter, the offer was finally submitted. We were told that we would know if the bank would accept the offer withing two days, well it was three weeks before the bank accepted the offer verbally, and another two weeks before we got a signed Sales Contract.
Once we had the signed Sales Contract the Realtor contacted a Home Inspector right away, but this also became a problem because the house had be winterized. The bank was contacted and the Realtor was told that they would have the house de-winterized right away, but apparently right away means almost three weeks. Once the house was de-winterized the Realtor got the Home Inspector in the house within a couple of days. but this still left the little matter of an appraisal. Anyone familiar with VA Loans knows that the Lender does not assign the Appraiser, the VA does, which means that the Appraiser does not respond with the same sense of urgency as the Appraisers on our list. However, we got lucky here, the VA Appraiser that the VA assigned was someone that was on my approved list of Appraisers, and the appraisal was done within a few days.
This should have been the end of the delays, but unfortunately it would not be. Once my Underwriter had received the appraisal from the Appraiser, she quickly finished Underwriting the loan, and the loan packet was sent to the Closing Attorney. The Attorney had already been made aware of what had been going on, and did the Title Search right away. This was when the next problem came to light. It seems that no one could find the Deed to this property to begin with, but that was not the total problem with the Deed. When they finally found the Deed, the bank was not on record as owning the property, so now that Deed had to be corrected on top of producing another one. This little last set of events took a month to correct.
How this Borrower ever put up with all the frustration that he went through on this transaction I will never know, but he did. I attended the Closing at 9:00 AM today, and the look of relief on his face was beyond words. Had this loan been any other type of loan besides one through CHFA we would of had even more problems, because the standard Rate Lock Period is 60 days on all loans except CHFA which is 120 days. If this had been a 60 day Rate Lock, we would of have an interest rate issue, because the interest rate went up during this time period. Now that would not have been a pleasant issue to deal with.
I was happy for this young man today, and glad that this nightmare was finally over, but I would caution others that this is not all that uncommon. Well maybe all of these issues at once was a little uncommon, but a combination of these issues are very likely on Foreclousers and Short Sales. As was evident with this loan, we can never prepare our Buyers/Borrowers enough.
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Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
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McCue Mortgage is a Connecticut based Mortgage Co., that specializes in first time homebuyers. However, we are equipped to service all homebuyer with many loan programs such as FHA, VA, & CHFA.
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George,
I've closed a few VA loans on my listings and they all went through fine but I was warned about them having issues and hold ups...but what else is new...some deals have delays and that sucks in general...glad to hear the buyer was willing to wait it out...I probably read that blog too.
Way to hang in there and get it done George!! The buyer must be very happy and relieved. It seems there are no easy transaction anymore.
I have found VA loans no more difficult than any other type. The problems that this buyer encountered could have been worse had it not been a VA loan.
Of course the banks wanted a conventional borrower to buy. They always do.
Well done!
George, you know there is only one thing worse than a REALTOR who thinks he knows some thing about lending interfering with you!
VA loans have been bad since they stopped letting us refuse their choice of appraiser. Now we're in for the same delays and incompetence on conforming loans, but that's another subject.
What could be worse than a know it all? A REALTOR that does know!
Bill
This home must have really been a good deal for the buyer to hang tough through all that. He is to be commended.
The part about the approval, both verbal and in writing sounds about par for the course with a bank owned property (REO) and Lord knows those people think they know IT ALL.
Sounds like the buyer had a good loan officer as well. A very important asset in today's market. Congrats!
George
That is a very happy ending indeeed
That's terrific news. Put another one on the books.
Ah George, a happy ending! I love to hear happy endings! It is just so tough out there right now, for both sides. I am looking toward better days ahead!
George - Getting this loan closed took a lot of perserverance and patience for everyone involved. Congratulations on doing what needed to be done to help this buyer get to the closing table.
Hi George~ Glad to see you got it closed. I hope you have many more happy endings!
George, congratulations on surviving one problem after another on this transaction and bringing the bacon home.
Neal the problem with this loan was that it was a foreclosure and the bank on the other side kept messing up. I usually don't have any problems with VA loans except the appraisal taking a little longer.
Bryant the easy ones are few and far in between these days, that is why we have to be on top of every transaction every step of the way.
Lenn, like I said to Neal the problem here was not that it was a VA Loan, it was with it being a foreclosure. The only problem that I had with it being a VA Loan was at the beginning with the other Bank and Realtor having wrong information about VA Loans.
Bill we usually do VA Loans pretty quick, but the appraisal can be a pain in the donkey. And you are right about the recent rule change on Conventional Loans, that changes is already creating problems.
Russell I thank you for the comment about the Loan Officer since that was me :) The Buyer did get a good deal on this house, it over appraised for $15,000.
Tom, yes it was.
Angella, I am very happy to put this one not only in the books, but behind me as well :)
Andrea, we just need to work together and a little harder and it will all come together in the end.
Donna, I give this young man a lot of credit, most people would have walked away.
Vickie, all Closings are happy ones, even the tough ones.
Gary, AHHHH bacon, I love bacon ....... LOL
George - Way to persevere and hang in there to get it done and as you say CLOSED ! Great sucess story.
Christopher and Stephanie, thank you, and yes CLOSED is one of my favorite words :)
George congratulations on getting the job done. I know that mortgages now are very hard to get done whatever bank you are dealing with.
Russ, yes most of them a a little challenging these days but this went beyond being a challenge. Foreclosures are becoming more like short sales these days.
Good for you and for him! Persistence pays!
George.. it is always good to hear that a deal has closed.. Not allare so simple
I think we have all been through those! Glad that it closed and hopefully you get an easy one soon!
It IS really hard to get a bank to accept an offer using a VA loan. Congratulations to all for getting this deal closed.
Please please please don't laugh ( I'm not!) this one is LESS complicated by a long long ways than the last 3 I closed, and less than the 3 I am working on. I feel so much for the clients in each case and in each case there is nothing (other than NOT taking the transaction that would have made things simpler!) It is great to know there are lenders who do all they can to hold transactions together and really care about the client too!
Great work on your part. However when I do pro bono work I want it to be voluntary upfront. This makes me glad we have mortgage people like you that are fiduciary without having to put that on paper.
I'm glad you were able to get this one closed. It must have been a great deal for your client to stay in the deal with this property.
George,
Congrats on the gold star on this one...and on closing it. Again I wonder why some people/institutions ruin deals.
Ann Hayden
George, congratulations to you and your patient buyer! I'm glad you pointed out that VA undewriting didn't cause the confusions or the delays because I'm so tired of VA mortgages getting a bad rap for no reason.
Makes you wonder though why the title process didn't start earlier..
I love happy endings to real estate sagas. The fact it closed is proof the effort is worth it, sometimes!
George, I just went through a similar transaction with a buyer in South FL - The seller was the US Marshall, and we had one issue after another. We finally closed it this month after many months of headaches!
Bridget, thank you.
Roland they all seem to have their own little twist.
Chuck, I have another Closing today that was much smoother.
Vickie, the funny thing is that it should not be. The ones that they should be concerned with these days are the Conventional Loans.
Anna, if you have harder transactions than this one, good luck, and I will keep you in my Prayers :)
Joe when I start a loan, it becomes my baby until it Closes.
Darrell, yes it was a good deal, the house appraised for $15,000 more than they paid for it.
Ann, good question especially since it was costing them money everyday that had it.
Kris, the Attorney does not do a title search until the loan is committed, and the loan can't be committed until the appraisal is done, that is why it took so long before a title search was done.
Andrew, you are right what is important is that it Closed.
Dan it just seems that one thing goes bad, things just seem to keep happening after that.
Nice job hanging in there and getting your transaction closed! I think I am working on one like that right now!
George,
These days it is a standard requirement on REOs that all participants prepare for a true marathon, because what you went through here is generally what happens all too often. Very frustrating.
George,
This is exactly why i have avoided working short sales and foreclosures like the plague, even though that is a lot of the business out there at this time.
I have to agree with Lenn on this one, the banks seem to be "steering" folks to use conventional. BTW You showed remarkable perseverance on this and it's a job well done
Allen, good luck with it, I hope it Closes.
Esko, "marathon" is a good way of putting it!!!
Ann, you really have to have a stomach for it.
Russell, you and Lenn are right, but Conventional Loans are not easy these days, and in many ways more difficult than FHA or VA because of downpayment requirements and points.
Happy endings are great aren't they.
Patricia Aulson/portsmouth nh
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