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We bought a house and now tomorrows closing is delayed

Posted by neesie (My Page) on
Wed, Nov 9, 11 at 15:58

We are supposed to close on a house we are buying for a rental property tomorrow. Our credit and everything checked out fine it has to do with the title of the house still being in the name of the person that owned it before it went back to the bank (VA loan).

All I know is that I intended on having my oldest son and his friend rent the home from us. They already gave their 30 day notice to their landlord and have packed all possessions except a few clothes, some TP and their toothbrushes.

The lady at the bank who called my husband with the bad news thought we might close before Christmas. What's the problem she asked, isn't it your son who is going to rent from you? Well, yes. But he'd prefer not to move twice. Plus he's got two big bulldogs that I'd prefer NOT to have running around my home! And at the moment he's got a truck loaded with furniture that is not covered and it will be snowing (we're in Minnesota) by Christmas.

Since we wrote the earnest money check a month ago to the bank, why do you think it took the title company a month to find out that the bank actually didn't have title to the home? I really want to hold someone accountable here. They made sure I had good credit and looked into all my bank accounts, retirement accounts, credit history and also required a 20% down payment. I came through. Someone else dropped the ball. True, they caught it before closing but shouldn't the bank have title before they asked ME for money? What about the house insurance I paid for a year in advance?


Follow-Up Postings:

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RE: We bought a house and now tomorrows closing is delayed

"Since we wrote the earnest money check a month ago to the bank, why do you think it took the title company a month to find out that the bank actually didn't have title to the home? I really want to hold someone accountable here"

Inconvenience is not the same as damages.

Do you have an attorney on YOUR side of the deal?

Now you know why you probably need one.

Who is doing the title search?

This should have shown up quickly (unless the title search was delayed for some reason).


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RE: We bought a house and now tomorrows closing is delayed

Welcome to 2011. You've heard about banks screwing up all the paperwork for foreclosures, right? This is just the kind of stuff that happens when you are bargain shopping in foreclosure land.


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RE: We bought a house and now tomorrows closing is delayed

By "accountable" I didn't necessarily mean hire and lawyer and sue someone. I'm not that upset! I just would like to give someone a piece of my mind after THEY investigated my personal finances inside and out.


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RE: We bought a house and now tomorrows closing is delayed

Oh, that is terrible! It sounds like the title insurance company waited until the last minute to do the title work. I guess this is why my agent got my title work going way ahead of time on two houses I was trying to buy. The deal fell through on the first one because the buyer on my house couldn't close, and it's possible the deal is going to fall through on the current house I'm trying to buy because my current buyer might not be able to close either. Which means that I am going to owe this title company two times for two houses I couldn't buy. I have to pay them. They don't work for free. Therefore it's possible, the way deals have been falling apart for people left and right lately, that they waited until the last minute so you wouldn't have to pay for work you couldn't use. I don't know--does that make any sense? It still really stinks for you though. I would not be happy if they told me I had to wait till Christmas and then, is there any guarantee that it will go through in the end? I'm so sorry you're going through this!


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RE: We bought a house and now tomorrows closing is delayed

I never understood why title companies always wait until the last minute to do their part of the settlement. But with the current economic situtation , I guess they have been burned too many times by settlements that never make it to the table.

It would be nice it a buyer could truly get pre-approved for a mortgage before they start shopping. Go through the underwriters and everything. Then the only thing that would need to be done for settlement is a verification that the buyers are still employed and that the house appraises for enough.

Kind of like the way we bought our last car. I got a loan from the C.U. and they sent me a check that could only be used at a car dealership. The dealer had to call the CU and give them the VIN number and purchase price before the check could be deposited.


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RE: We bought a house and now tomorrows closing is delayed

The problem with getting preapproved all the way through the underwriter, is that about 50% of people that get pre approved do not buy. Who wants to waste 50% of their time? The other problem would be that the time between the pre approval and the closing allows someones credit worthiness status to change dramatically.
If a person is asking someone to loan them a very large amounts of money, one should expect that person to perform due diligence right up until the time the check is cashed... wouldn't you?


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RE: We bought a house and now tomorrows closing is delayed

"The other problem would be that the time between the pre approval and the closing allows someones credit worthiness status to change dramatically. "

And why pre-approvals are not worth the paper they are printed on.

They ALWAYS have an out for the bank to not make the loan.

How they achieved such exalted status is a mystery.


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RE: We bought a house and now tomorrows closing is delayed

Up until a couple years ago, a pre-approval was pretty solid. Nothing is 100%, but they were certainly a good indication that the loan was going through.

In the current climate, much of that certainty has disappeared. Not only could the borrowers status change, but the lending standards of the institution might was well.


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RE: We bought a house and now tomorrows closing is delayed

"Up until a couple years ago, a pre-approval was pretty solid."

Then why have they always contained weasel words and the lenders perform another credit check before closing?

They have never been "pretty solid."
Just a 'feel good' piece of paper.


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RE: We bought a house and now tomorrows closing is delayed

Getting a pre-approval may not mean that you will be approved in the future, but NOT BEING ABLE to get a pre-approval means that you can't be a serious buyer.

The problem is that banks are giving out pre-approvals too easily.


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RE: We bought a house and now tomorrows closing is delayed

"Then why have they always contained weasel words and the lenders perform another credit check before closing? "

They never have contained "weasel words". That is just nonsense. They have always and will always contain language that protects the bank in the event something material about your finances changes .

And yes, they certainly were pretty solid in the past. If a person was pre-approved, there was a very high chance that the final financing would be approved. Of course it wasn't 100% - nothing is. It certainly was a lot higher than what we are seeing now. The actual loan is getting a much higher level of scrutiny and a lot of loans that would have sailed through 5 years ago are falling through.


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RE: We bought a house and now tomorrows closing is delayed

"it has to do with the title of the house still being in the name of the person that owned it before it went back to the bank (VA loan)."

Probably another fraud by a lender, trying to sell a home they don't legally own.

Here is a link that might be useful: FOLLOWING THE MONEY


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RE: We bought a house and now tomorrows closing is delayed

OP here. My son's friend who finances mortgages said that a great deal of mortgages fall through because people really aren't qualified and he was surprised about our situation. The loan we are asking for is not "a great deal of money". The loan officer at our credit union told us we had the best credit scores she'd seen in a long time. We have more than the required 20% down payment in a money market account at the CU and the home we live in will be paid in full in less than a year. I understand that foreclosures are high etc. but they thoroughly checked us inside and out and found us to be on the up and up. So I expected them to do their part of the bargain. The problem with the title is not my doing and if they would have found it sooner they could have fixed it so it wouldn't have delayed closing.


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RE: We bought a house and now tomorrows closing is delayed

Nessie,
Your credit or past history has nothing to do with the fact that the seller can not pass on a clear title. Sheesh, just be thankful they did their job. You probably won't get much sympathy here. There are a lot of posters here who ARE really hurting.
BTW... you can terminate the contract at anytime and get a refund of your EMD if you are really that upset.


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RE: We bought a house and now tomorrows closing is delayed

Pre-approvals are worthless. I got one from every single one of my buyers and it gave me no insurance whatsoever. If I lose my latest buyer and have to do this whole thing all over again, this time I will demand a very long closing date and I will sit tight and do nothing until the buyer has the commitment and everything possible that needs to be done is done. THEN, and only then, I will pack and schedule whatever I'm responsible for. It's the only way I can think to do it if a bank is involved. I could not do this for my current contract or the previous ones because the buyer picked the closing date. Actually, with this last one, the banker and the buyer picked the closing date together! And now they missed two closing dates, it's been a month since we were supposed to close, and all they're saying is it all looks good and they've got everything they need now. In the meantime, I'm supposed to be ready the minute they decide they might actually want to get this show on the road.


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RE: We bought a house and now tomorrows closing is delayed

"They never have contained "weasel words". That is just nonsense. They have always and will always contain language that protects the bank in the event something material about your finances changes . "

Every one says that it is NOT binding, is subject to review, etc.

Those ARE weasel words, even if they are "language that protects the bank."

It is NOT a loan commitment or contract with the bank that is binding, making it a worthless scrap of paper to make folks 'feel better.'


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