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#2173804 - 04/17/18 03:56 PM Waive Recission-Bona Fide Emeregency
mdog76 Offline
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Is there a "list" of bona fide emergencies to waive rescission?

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#2173805 - 04/17/18 04:01 PM Re: Waive Recission-Bona Fide Emeregency mdog76
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#2173806 - 04/17/18 04:07 PM Re: Waive Recission-Bona Fide Emeregency mdog76
mdog76 Offline
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Thanks for the help. What would be everyone's opinion on that if the seller did not have funds at closing date, the deal would be called off? Could that pass as bona fide emergency?

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#2173811 - 04/17/18 04:19 PM Re: Waive Recission-Bona Fide Emeregency mdog76
rlcarey Online
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What does the seller not having funds have to do with requiring that you expedite a loan transaction? I don't understand?
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#2173816 - 04/17/18 04:25 PM Re: Waive Recission-Bona Fide Emeregency mdog76
mdog76 Offline
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If the buyer doesn't have the funds at date of closing, the seller will not continue with the transaction. I feel like the loan officer/customer is reaching a little here on this one.

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#2173819 - 04/17/18 04:28 PM Re: Waive Recission-Bona Fide Emeregency mdog76
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I still do not understand. Now you say the buyer doesn't have funds. How does making the loan a couple of days earlier solve that issue? You mean their purchase contract is going to expire? That is poor planning and not an emergency. The only person taking a risk on allowing a waiver is the bank. Banks do not take on that risk lightly.
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#2173820 - 04/17/18 04:31 PM Re: Waive Recission-Bona Fide Emeregency mdog76
Rocky P Offline
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Sounds like poor planning.

I only saw one case (in 45 years) where the bank took the risk of the "emergency", and only because the applicant had given plenty of time for the transaction, but the bank "lost" the application in processing, and mentioned in an e-mail that the application was "just found" after the customer inquired several times. It was the bank's fault that the loan was not processed in ample time, and they were going to catch heck no matter what.
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#2173821 - 04/17/18 04:32 PM Re: Waive Recission-Bona Fide Emeregency mdog76
mdog76 Offline
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This is what happens when compliance is last one to here about these things. I'm getting it in pieces but the story is that the seller is using funds from our borrower to purchase another house and can not wait three days on their deal so our borrower is willing to waive recission. Don't think this would fly if examiner saw it.

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#2173823 - 04/17/18 04:34 PM Re: Waive Recission-Bona Fide Emeregency mdog76
Rocky P Offline
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mdog, it was set to fail from the beginning, as the 3 days appear to never have been considered.
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#2173824 - 04/17/18 04:36 PM Re: Waive Recission-Bona Fide Emeregency mdog76
rlcarey Online
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This is not the consumer's emergency - end of story.

Official Interpretation

23(e) Consumer's Waiver of Right to Rescind

1. Need for waiver. To waive the right to rescind, the consumer must have a bona fide personal financial emergency that must be met before the end of the rescission period.
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#2173832 - 04/17/18 04:58 PM Re: Waive Recission-Bona Fide Emeregency mdog76
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I must be missing something. Why is there ROR on a purchase?

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#2173839 - 04/17/18 05:14 PM Re: Waive Recission-Bona Fide Emeregency mdog76
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You know TR - that is a very good question smile
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#2173922 - 04/17/18 09:26 PM Re: Waive Recission-Bona Fide Emeregency mdog76
David Dickinson Offline
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I assume this is a bridge loan. mdog: can you give more info?

As everyone is stating, poor planning is not a bona fide financial emergency.
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#2173939 - 04/17/18 11:57 PM Re: Waive Recission-Bona Fide Emeregency mdog76
Darth HMDA, CRCM, CAMS Offline
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Agreed - Imminent foreclosure in two days? Need cash out to pay for open heart surgery tomorrow or their family member is going to drop dead?

Honestly those are the only two examples I have ever heard of - anything else is not a "bona fide" emergency (even if it is in the consumer's eyes).

But as Truffle pointed out - is this a purchase?
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#2173989 - 04/18/18 02:22 PM Re: Waive Recission-Bona Fide Emeregency mdog76
Dan Persfull Offline
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Need cash out to pay for open heart surgery tomorrow or their family member is going to drop dead?

Is that a financial emergency or a medical emergency? Just food for thought.

As for the referenced transaction it could be one where the property being purchased and the existing primary dwelling are both securing the purchase loan. Or as David asked a bridge loan.
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#2174002 - 04/18/18 02:40 PM Re: Waive Recission-Bona Fide Emeregency Dan Persfull
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For the sake of discussion, let's assume that the loan in question fits into
Quote:
where the property being purchased and the existing primary dwelling are both securing the purchase loan. Or ... a bridge loan.

If the seller is going to walk if they don't get their money by a certain date, isn't that a financial issue for the borrower who will likely lose their earnest money and fees on the loan? (not to mention mental anguish) Anyway, I'm curious because I've been in situations where closings flip flop instead of following the natural order of sell/buy. Thankfully, none of mine had a recission involved but I'm still curious.

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#2174006 - 04/18/18 02:43 PM Re: Waive Recission-Bona Fide Emeregency mdog76
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Afterthought: I'd be making darn sure that my bank didn't do anything that could be misconstrued as delaying closing. Unfortunately, the way mdog's situation reads, this sounds more like the LO not counting days properly = bank error. If that's the case, I'd be consulting legal to cya against lawsuits, especially if the borrower looses the property they want to purchase.

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#2174030 - 04/18/18 03:17 PM Re: Waive Recission-Bona Fide Emeregency mdog76
Dan Persfull Offline
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isn't that a financial issue for the borrower who will likely lose their earnest money and fees on the loan?

Not IMO. The purchase contract spells out by when the closing must take place. If the buyer/borrower didn't begin and complete the necessary steps to meet that date then as has been said that is poor planning, not an emergency.
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#2174039 - 04/18/18 03:41 PM Re: Waive Recission-Bona Fide Emeregency mdog76
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I know there are cases where the borrower drags their feet getting info to the lender but unfortunately, at least in my world, these cases are far outweighed by delays that are totally out of the borrower's realm of control. I'm inclined to think that's what happened to mdog's LO who is now trying to cy-his-a by getting the borrower to sign a waiver.

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#2174106 - 04/18/18 05:48 PM Re: Waive Recission-Bona Fide Emeregency mdog76
RR Joker Offline
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Assuming this is a bridge or similar and ROR really is required, I've seen this happen and usually the Realtors are the ones who raise the most cane. They want their money smirk After one such fiasco, we make SURE all parties are very aware [even so far as for it to be a part of the contract] that ROR will be involved and have never had an issue with it ever again.
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#2174130 - 04/18/18 06:52 PM Re: Waive Recission-Bona Fide Emeregency mdog76
Dan Persfull Offline
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TR - regardless I'd rather defend not providing the ROR waiver then having to defend allowing the waiver, losing in court and ending up with a $250,000 unsecured loan. Especially if the borrower ends up in bankruptcy.
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#2174274 - 04/19/18 04:22 PM Re: Waive Recission-Bona Fide Emeregency mdog76
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I totally agree, Dan. I'm just trying to point out that the delay doesn't sound like it is borrower driven.
Let's be honest, borrowers pick a house and then rely on realtors and bankers to get the deal done.
Their date focus is on when they can get a moving truck and time off work.

As for losing in court, I think mdog is faced with choosing the lesser of two evils: let the deal fall apart and never close at which point the borrowers will undoubtedly get an attorney involved and sue the bank for losing the house or get an ROR waiver.

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#2174276 - 04/19/18 04:40 PM Re: Waive Recission-Bona Fide Emeregency mdog76
rlcarey Online
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Since mdog has apparently checked out of this thread we are left only with the information provided:

" I'm getting it in pieces but the story is that the seller is using funds from our borrower to purchase another house and can not wait three days on their deal so our borrower is willing to waive recission."

This is not a financial emergency of the borrower - end of story.
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#2174318 - 04/19/18 06:10 PM Re: Waive Recission-Bona Fide Emeregency mdog76
David Dickinson Offline
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I agree this isn't a financial emergency. The closing date should have been known well in advanced. The bank could have done a bridge loan, secured by the current dwelling, 3 days prior so the RofR expired before the closing on the new home.

Again, poor planning is not a financial emergency.

In all my years (28+) the only emergencies I have seen are funeral expenses and a flood that was coming (to buy thousand of dollars in sand bags) . In both cases, it was odd because the borrower didn't have other resources to pay.
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