Force buyer to remove financing contingency? 14 days overdue

[Chris May]

I'm looking for some advice here. We're selling our house and have been in escrow for 31 days now. The contract states 18 days for financing contingency removal.

Basically the buyer's mortgage broker and the bank (Chase) have us stuck in an endless cycle of bureaucracy and the financing contingency still hasn't been removed. It seems like there's one small thing after another. The buyers seem to be just as frustrated as us.

I'm trying to figure out if we should force the buyer to remove the financing contingency as a sign of good faith and risk them cancelling, or just continue with the extensions.

From what I can gather, we've been waiting on a reissued 4506T from the IRS because the bank didn't like how the first one was filled out. I'm told this is the last thing before drawing up papers but I'm not sure I believe that anymore. The lender requested it on July 21 but we're still waiting which I'm told is on the long side of normal. I'm told best case scenario would be closing on Aug 8.

We can't afford to carry this house much longer and are considering just moving in and house hacking. The thought of that makes me a little sick though.

Any advice?

[Chris Mason]

@Chris May

Two facts.

1) You cannot use Chase Bank on purchase business in the Bay Area, they are refinance only, I don't care what interest rate pricing they quote. I offer their products when I put my broker hat on, but no way in hell for purchase business because of the type of stuff you are now encountering. Horrible turn times, erratic, unreliable, slow, etc. It's not worth it to lose a house so you can get promised that your discount points 0.25% less for the same rate - interest rate pricing doesn't matter if you do not get the house at all!

2) Fannie Mae requires a signed 4506-T form. They do not require a fulfilled IRS transcript return, but it's a loan buy-back which is a big huge horrible deal for any lender. An alternative is to look at old bank statements and find proof that the "amount you owe" on page 2 of the tax return lines up with some check or wire to the IRS.