Temple Schneider'Callahan - Ventura, CA

What to do when the Buyers side changes Lenders while in Escrow!

This just happened to me. I had a short-sale listing where it took 4 months to get formal short-sale approval (Indymac). Finally, when we got it, we were given 45 days to close the deal. No problem, right? The buyer - a high earning white-collar professional, had already been pre-approved with Bank of America, and was well-able to close in 30 days. The Seller wanted to close in 30 days too. Everyone was very happy.

Well... About a week later, the Buyers decided to switch lenders, and get a different loan, with a lower down payment, and a slightly better rate, over at Wells Fargo. The Buyers Agent told me that the Buyers were doing this, but assured me that it would not effect our closing date - they were already "pre-approved" at Wells Fargo, and besides that - they were still "pre-approved" at Bank of America originally. I felt fine with this, I had a good report with the Buyers Agent, who has about 20 years more RE experience than I do...

Here's where hell broke loose. Three days before closing, Wells Fargo Underwriting got stuck on verifying the Buyers Income, which came from his own corporation. WF Underwriting insisted that this was not "income," but rather was a "draw" off of the company's assets. Therefore, they disqualified a huge portion of the Buyers Income, and you guessed it - flat rejected the loan. The flat rejection part happened THE DAY BEFORE CLOSING.

So what happened next? We had 15 days to close. The Buyers had to go BACK to the original Bank of America Loan Officer - yes, the one that the Buyers dumped - and beg for his speedy help. This Loan Officer was, of course, irritated that the Buyers were now back in his lap - and cracking the whip to get the loan through in just 15 days. I have found that no amount of edification, appreciation-ooozing emails, or offers to drive Loan Docs anywhere in Southern Ca - will get you a closed deal in 15 days. This guy was a resistant, grudge-holder.

I had to get a 5 day extension from Indymac - short-sale lender. Lucky for me, this was my first request for an extension. We closed the deal about 4 days later than the original 45 day escrow allowance.

This roller-coaster ride taught me a few things. Here's what I learned...

When I have a listing in the future, where the Buyers Agent explains that the Buyer has decided to "switch lenders," I will do the following:

1.) Immediatley issue an Addendum, re-confirming the scheduled close date of escrow - which allows me to put a cap on the time allowed to perform. Then I won't be contested for issuing the Notice To Buyer To Perform (also, if you end up in Arbitration, you are doing things the right way).

2.) Also, to keep the Buyers on the straight and narrow, I will include a request for a $150.00 per day, "per-diem" for each day we go over the scheduled COE. (This may or may not work, if the Seller has stopped making the payments, don't think they are allowed to collect any procedes - but the "per diem" could be paid to the short-sale lender. The purpous of the "per-diem" is to put pressure on the Buyers to perform on time.)

3.) Also, I will require that the Buyers continue to pursue the original loan program, simultaniously - should their new loan program fail. That way we will not loose any time, and be able to close the deal.

4.) I will change the status of the property in the MLS, from "pending," back to "contingent back-up" right away. This will allow for back-up offers to come in, keeping your Seller protected.

5.) The thing that I also believe helped us to close this deal AT ALL, was prayer!! "Nothing is impossible with God." - Luke 1:37

Hope this helps you!!

Just read about some new programs that can help home shoppers save a ton of money...!

Check this out... You can research what programs are available in a given County!

A Home Buyer can obtain the Federal tax credit (if you close escrow by November 30, 2009) - after you buy the home, BUT, builders, some sellers, some lenders will give you cash when you need to seal the deal at the end of the transaction.

In June, California reinstituted a down-payment loan program and special loans for homes owned by the California Housing Authority. To find out more information, try the U.S. Housing and Urban Development
Website: http://hud.gov.

Or try the Federal Housing Administration or the Department of Veterans Affairs... Good stuff!!

Even in this market, some cities have funds earmarked to help develop particular neighborhoods. In Ventura County, check with your mortgage lender, local Area Housing Authority or Cabrillo Economic Development Corporation, Neighborhood Works Program.
KEY!! Before you decide on a mortgage bank (Wells Fargo, Bank of America, etc...), make sure to contact your employer's human-resources office. A lot of times, major companies and nonprofits like Universities often have arrangements with lenders or local government to help their employees. If you don't have any good news there, try Googleing; "employee mortgage program CA" and the name of your profession, just to see if you qualify for a particular deal out there!

Also, if you happen to be a "community Hero," (Police, Fire, Teacher, Doctor, Nurse, Govt / County / City Employee), then you can get sizable discounts on ALL your Home-Buying Fees... Ask me more about "HeroCare" benefits available...

Have a great day!

- Temple Schneider'Callahan

What is the antidote for worry? My husband just read it to me...

"Be anxious for nothing, but in everything by prayer and supplication, with thanksgiving, let your request be made known to God." Phil. 4:6

In our busy world it's so easy to get caught up in the details and forget what's really important. When I feel that happening to me, I pull out this story to remind me to stop - think - and remember what the "rocks" are in my life.

Here's a quick story for you; A philosophy professor stood quietly in front of the class, waiting for students to take their seats. When they were ready, he silently took an empty mayonnaise jar from his desk and filled it to the top with rocks, about two inches in diameter. When he was done he asked the students whether the jar was full. They replied that, sure, it was full.

Next the professor took a box of small pebbles and poured them into the jar, shaking the jar so that the pebbles fell into the open areas between the larger rocks. His students were amused. When he asked the students again if the jar was full, they agreed that it was.

Then the professor poured in a box of sand, which naturally filled up all the spaces in the jar between the rocks and the pebbles. Then he explained the purpose of the exercise... Holding up the jar, he said "This is your life. The rocks represent all the important things - like family, relationships, your health, the things that are so important, that if you lost them, you would be devastated." Next he said, "The pebbles represent the other things that matter, but are less important - like your job, a car or a house. They are less meaningful to you, compared to your family, relationships and your health." Finally he said, "The sand represents everything else. If you put the sand in the jar first, there would be no room at all for the rocks! It is the same thing with your life. If you spend all your energy and your time on the unimportant things, you won't have room for things in life that really matter!

His advice was, "So, set your priorities. Be mindful of what your 'rocks' are. And remember that the rest is just sand and pebbles."

I hope you like this story. I keep it handy for whenever I need a refresher on what's most important!

God Bless You!

Temple

Do we pray for anything more fervently, more diligently or more desperatley than we do for our kids? Here are the top 10 things to pray for...

1.) For Godly wisdom...

2.) For strong character...

3.) For a spirit of excellence...

4.) For Humility...

5.) For a desire to know God...

6.) For life direction...

7.) For favor...

8.) For discernment...

9.) For the right friends, right spouse...

10.) For respect towards authority...

Have a fantastic day!!