Lender backed out HOURS before closing! NOW WHAT?!

[Gail W.]

Everything has been sailing along smoothly on a 6 plex deal... we just retired, drained our 401k, and were all ready to go in the next morning to sign, when the lender (Trans United doing a DSCR) calls us and tells us his pool of investors went from 50 or 60 all the way own to 5 to 8!! "Probably because of Ukraine and all that..."

They started with saying the 6 plex looked like a manufactured home. To which we replied with proof it was NOT. Hours later, he calls and says it's been denied due to "Inadequate Collateral/Unacceptable property!  We paid over $3k for an appraiser who you would have thought might have said something like, this is a manufactured home, if it was. No, they stated it was well above asking price. The inspector describes the concrete slab, traditional site built lumber, etc... What the heck?! 

Now we have lost our $15k earnest deposit as we are outside of the 45 day due diligence (seller kicked the signing forward a week because he was on a cruise- I could just SCREAM!!) and we are out all the other fees (inspections, appraisals, etc).  Sellers agent said the seller is willing to give us another 45 days to secure financing as he is experiencing the same issue on a deal he is doing in Hawaii. Even hooked us up with a lender who does "more traditional" loans, who we are waiting on to let us know if he really CAN help us.

We are suspecting not because the whole reason we went with a DSCR was due to recent retirement and other investment properties haven't shown long enough earnings or are STRs (we have heard "we don't like to count AirBnB style earnings" more than 4 times in our search). Now we have $300k pulled from the 401k (TAXES!) sitting here and aren't sure WHAT to do! I can't even believe this is legal! I have never had a deal pulled within hours of closing. And while I'm sure it's done all the time, this is such a weird reason! ANY IDEAS?

Passive income my ***. 

[Russell Brazil]

Seems straight forward enough....contact the lender the agent gave you as a contact. Additionally, contact some other lenders.

Are you using your own agent on the deal? A good agent should have a good network of lenders in that area. (If not, next time do, it would have saved you a lot of money here by steering you away from this crappy lender)