Unethical lending Practice

[Jowan Chism]

We’re are in the final day of escrow our lender called us on Monday and said they sent over VOE’s to our jobs and needed us to make sure they were completed so that we could close on Wednesday (today). So we scrambled to get that done and sent back to them. Mind you we are supposed to close today!

They called us yesterday and told us we have to pay off my wife’s car as a stipulation of closing!!!! Literally the day before we are supposed to close! And we removed our contingencies so if we pull out the seller can take our earnest money.

Loan officer is claiming they don’t know what happened and has no explanation. But had informed us via phone that we could close last week because we were good to go. 

Can anything be done about this? 

[Dan Schwartz]

@Jowan Chism you always have a choice.  Never sign a mortgage because you think you have no other choice.  Take that from experience, which I won't go into.  BUT, life's going to be very difficult/hectic for a short while as you sort this out.

1) Get all over your lender.  Tell them that wasn't a condition of the loan and ask how else can it be solved.  Get their brightest minds involved.  See if any bright minds here will help privately (no need to spill all the beans in public).  They risk losing their fees if you walk away.  You are not obligated to take their money until you sign for it.

2) Get with the seller right away.  They are unlikely to be interested in blowing up the sale if you need an extra day or two to sort this out.  "Taking the earnest money" sounds sexy, but remember they also have plans to move, they'd need to resist the house in a buyers' market, carry it an extra month or two, etc etc.  The earnest money eases the pain and frustration of that, but it's likely that they'd still rather close with you.  Have your agent see what they need.  Don't assume they won't budge.

3) Paying off the car might be an OK thing to do.  Car loans aren't terribly hard to get, but rates may be higher than what you currently have.  When you've lived with this knowledge for 24 hours instead of 24 minutes (you get the point), does paying off the car shock/piss you off, or does it really harm you?  Get somewhere where you can rationally think about this, holistically.  You didn't intend to pay off the car, so this is a terrible addition to the equation. But is it?  If the lender can't get around it, can you.

Good luck!