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loan officers and their responsiblity in purchase of a home

dougp26364

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Our DD and SIL are in the process of building a house. They are suppose to close on 10/24. The loan officer was supposed to have submited all the paperwork by 10/1.

Despite the fact that all the information requested had been given to him, in some cases more than once, he failed to get the paperwork in on time. His failure has resulted in the bank demanding an additional 3% down payment, which amounts to another $3,500. This is money the kids don't have.

It seems to me that the loan officer had a responsiblity to act on their behalf and failed to do so in a timely manner. His actions could cause them to lose the house they've had built and set them back quite a bit.

I realize this has to be in general terms since laws change from state to state but, Where should we start turning over stones to get this straightened out prior to reaching their closing date.

My advice has been to contact the banks loan office manager as the loan officer has been ignoring their calls and e-mails. Failing the bank making good on what should have been done by their employee I'm contemplating ponying up the retainer for a real estate attorny to see what our options might be to hold the bank responsible for their loan officers actions. It's not just the $3,500 at stake but all that time and addition stuff purchased and arranged for the move in not to mention possibly having to find a place to live on short notice.

One other twist to this story is the builder literally forced the kids to use this particular bank. They had obtained more favorable terms with another lending insitution but the builder refused to work with anyone else. Seems this wasn't exactly a legal thing to do and could cause him partial responsiblity in this matter.......or maybe not.
 

DonM

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... The loan officer was supposed to have submited all the paperwork by 10/1. .

I doubt that the date was a contractual promise, and therefore there was no legal requirement to have the paperwork submitted by that exact date.

... His failure has resulted in the bank demanding an additional 3% down payment, which amounts to another $3,500This is money the kids don't have. .

Not that it matters (see above response) but the increase in the dp might have occurred anyway


... One other twist to this story is the builder literally forced the kids to use this particular bank. They had obtained more favorable terms with another lending insitution but the builder refused to work with anyone else. Seems this wasn't exactly a legal thing to do and could cause him partial responsiblity in this matter.......or maybe not.

Not

When it comes to dealing with banks or any business for that matter, you can choose not to do business with institutions that are inefficient- but in this day and climate lending and borrowing money is difficult. It's probably a great time to buy if you can afford a good dp

I don't believe (I'm not a realtor or attorney ) that the builder has to sell or deal with any institution he doesn't want to- unless the buyer is a cash buyer- then he can't discriminate.
 

nazclk

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Loan Officers

Two things, first go to the builder and tell him he will be eating his house and that you will sue him for the down payment, as the bank he required you to use is not performing in a timely fashion. Second go to the manager of the bank where you are taking out this loan and explain the situation to him/her
and that if it is not resolved in a timely fashion that you will go elsewhere. Should you need to go elsewhere make sure that there is a drop dead date on the contract.

With the real estate market the way it is, I don't think the builder wants to eat that house and I would assume he will jump on the bank as well.

I had a similiar situation a couple of years ago.
 

Jya-Ning

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One other twist to this story is the builder literally forced the kids to use this particular bank. They had obtained more favorable terms with another lending insitution but the builder refused to work with anyone else. Seems this wasn't exactly a legal thing to do and could cause him partial responsiblity in this matter.......or maybe not.

They get kick back from the bank. Usually, they offer certain incentive if you use their bank. $0 if you don't use that bank (which means they need to come up more).


Jya-Ning
 
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