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#1518543 - 03/08/11 03:49 AM Need help - am I getting the short end from bank?
Anonymous
Unregistered

New to this all. Working with a large bank to purchase a new construction home. The bank told us when we get a contract with the builder to call them so they could lock in the rate.

Now the bank says the rate lock is for 90 days (expiring 6/7) but the house won't even be done until around 6/24. Again, new to this and it wasn't explained well to me. The bank wants us to tell the lender to move back the closing date so this rate lock can expire and start all over again. Should I tell the bank that I am keeping my rate lock they gave me and its their problem?

Did the bank already sell the note and now they are worried they are stuck if the house is never built? Am I on the short end of this deal?

Please Help!

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#1518546 - 03/08/11 04:02 AM Re: Need help - am I getting the short end from bank? Anonymous
rlcarey Offline
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rlcarey
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Posts: 79,633
Galveston, TX
That is why anyone that is not well versed in real estate transactions should be represented by an attorney. Without many more details, you are going to be hard pressed to get any solid advice.
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#1518931 - 03/08/11 08:15 PM Re: Need help - am I getting the short end from bank? rlcarey
Anonymous
Unregistered

I guess the main question is why did the bank call me back later in the afternoon fretting that the rate was locked. I can only see it as a win for me. If the lock expires, I pay $750 to extend it. It is 4.75 for 30 years. Am I missing something?

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#1519333 - 03/09/11 04:24 PM Re: Need help - am I getting the short end from bank? Anonymous
Truffle Royale Offline

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Ask a Banker and Banking Questions.com are sister sites set up for use by consumers. You may find that someone has already asked a similar question or you can post yours there.

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#1519359 - 03/09/11 04:45 PM Re: Need help - am I getting the short end from bank? Truffle Royale
Dan Persfull Offline
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Dan Persfull
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Posts: 46,839
Bloomington, IN
Quote:
Now the bank says the rate lock is for 90 days (expiring 6/7) but the house won't even be done until around 6/24.


As Randy stated there's not enough information to answer definitively. However if I understand the above the bank that will take out the construction loan locked a rate for 90 days and it expires 6/7. The home will not be completed and ready for occupancy until 6/24 or after.

So what is the concern? The bank will not take out the construction loan until the home is complete and ready for occupancy and it must be completed and ready for the loan to close on or before the lock expiration. By the time the home is complete (6/24) the lock will have expired and they (the bank) are no longer obligated to honor the lock.

If the home gets completed and ready for occupancy and loan closing before the lock's expiration then they (the bank) should be willing to honor the lock. Just my 2 worth.

But as said earlier this is based only on the information posted. It does not take into consideration any specific language in the lock agreement or any other processing agreements that may have been signed.

ALSO - pay close attention to my tagline.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1519427 - 03/09/11 05:31 PM Re: Need help - am I getting the short end from bank? Dan Persfull
Anonymous
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Thank you all for your help, I'm still working with the bank to figure out what exactly is happening. The tough part is that it is only 1 loan (construction+mortgage), and that is why it is so confusing. I truly appreciate all of yall's help!

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#1519491 - 03/09/11 06:41 PM Re: Need help - am I getting the short end from bank? Anonymous
Anonymous
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if you didn't have an attorney, that is ignorance on your part. and, if you did have an attorney and they aren't helping you, you need a different attorney.

ignorance on the consumers part is a lot of why we are in this financial turmoil to begin with. ask questions up front if you don't know, and always have an attorney!

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#1519688 - 03/09/11 09:32 PM Re: Need help - am I getting the short end from bank? Anonymous
Anonymous
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I very much disagree with the last post. Being a home loan "guru" for my bank, I have co-workers who are totally lost and confused when it comes to these loans, so how in the world do we expect consumers to understand? And WHY should you have to hire an attorney just to get a loan? That is a ludicris expectation. If nothing else, it furthers the belief that some (not all) bad bankers/mortgage brokers helped contribute to this mess, along with consumers making decisions based on whether or not they could "make the monthly payment".

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#1519695 - 03/09/11 09:39 PM Re: Need help - am I getting the short end from bank? Anonymous
Anonymous
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I totally agree; no one should have to hire an attorney to get a mortgage/buy a home.

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#1519696 - 03/09/11 09:40 PM Re: Need help - am I getting the short end from bank? Anonymous
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Quote:
if you didn't have an attorney, that is ignorance on your part.....gnorance on the consumers part is a lot of why we are in this financial turmoil to begin with


Those are pretty harsh statements. frown

I would have to take particular issue with the last statement. What got us in this mess were loan brokers wanting to make the all high mighty dollar and pressuring C & D credits into higher priced loans. And the "big" banks securitization of mortgage pools. It was not the consumer. I'm not saying some of them did not play a part in it, but is was a very small part.

A so called "church" friend of my daughter and SIL tried to the same to them after they decided to give him their business because of their relationship with him in church. Long story short they were smart enough to come see me after getting the GFE & ETIL. I got them away from the option ARM being quoted and into a 30 year fixed rate at the prevailing rate at that time and about 1/5 of the closing costs.

So if you want to blame anyone blame the brokers.
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#1519807 - 03/10/11 01:53 AM Re: Need help - am I getting the short end from bank? Dan Persfull
rlcarey Offline
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rlcarey
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Galveston, TX
To the above anons, while I agree that the post regarding regarding not have an attorney above was harsh and uncalled for - entering into a real estate transaction is probably one of the most complex legal transactions that a normal person is ever going to engage in and your response is that no one should need an attorney to do it.

I have bought more houses and am probably more familiar with real estate and finance law than 99% of the general population and I would not even dream of engaging in a real estate transaction without one.

As the old saying goes: A man who acts as his own attorney has a fool for a client
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#1519893 - 03/10/11 02:36 PM Re: Need help - am I getting the short end from bank? rlcarey
RR Joker Offline
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The Swamp
Agree 110% with what Dan and Randy both had to say on this subject.
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Say you'll haunt me - Stone Sour

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#1519898 - 03/10/11 02:46 PM Re: Need help - am I getting the short end from bank? Anonymous
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,281
Originally Posted By: Anonymous
If the lock expires, I pay $750 to extend it. It is 4.75 for 30 years.


Why not just extend the lock?
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Kathleen O. Blanchard, CRCM "Kaybee"
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#1520141 - 03/10/11 05:24 PM Re: Need help - am I getting the short end from bank? Kathleen O. Blanchard
Anonymous
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I'm the original poster of the question...trust me, there is no offense taken that an attorney should be involved. The lenders should do a better job explaining the "why's" of doing certain things.

Kathleen, to answer your question, that appears the best option, but why did they tell me to lock the rate now when they knew it would expire? Seems to me they wanted the $750.

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#1520202 - 03/10/11 06:19 PM Re: Need help - am I getting the short end from bank? Anonymous
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
It's your choice to lock or not...you are protecting the rate, but it is a gamble..rates could go up or they could go down. They are awfully low, so why not protect that, even if you may have to pay a little more to extend it due to construction time?
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

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#1520235 - 03/10/11 06:41 PM Re: Need help - am I getting the short end from bank? Anonymous
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,281
Originally Posted By: Anonymous
I'm the original poster of the question...trust me, there is no offense taken that an attorney should be involved. The lenders should do a better job explaining the "why's" of doing certain things.

Kathleen, to answer your question, that appears the best option, but why did they tell me to lock the rate now when they knew it would expire? Seems to me they wanted the $750.

It might be that they only lock for set periods of time - an arbitrary time period they selected or it could tie to how they price - what they are pricing against, blocks of funds (time deposits, etc.) There are many variables.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#1520251 - 03/10/11 06:54 PM Re: Need help - am I getting the short end from bank? Kathleen O. Blanchard
nemsi Offline
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Joined: Nov 2005
Posts: 383
If you were my son I would tell you to pay the $750 and extend the rate- it's a good rate. My son has bought 5 houses and you would think that he's experienced but he always has mortgage questions for mom. Good luck and enjoy your new home.

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