Closing day, loan funds but no title -- Help!!

[John Lee]

Need some help and advice from anyone who might have faced a similar situation: We came to the day of closing and got notified from the escrow office that the city had placed a lien on the title due to an inspection issue (minor fencing issue). We financed a conventional loan and it had funded, but since we were unable to close and obtain title, the loan was sent back. Sellers admitted it was their fault and are working quickly to resolve this. They were very apologetic (we had known about the fence issue but did not think it would be that big of a deal). Now our lender is saying we have to pay close to $100 per day for a rate lock (since the fed meets soon and could raise rates, we think it's a good idea). The sellers initially were willing to pay any costs we might have, but now don't want to pay this high amount since the permitting process for the fence could take anywhere from 1-4 weeks. We could cancel the loan and reapply but we would be subject to a 0.25% cancellation penalty (since we are in SoCal, this is a significant amount). The sellers think this is unusual and don't want to pay it. Since the loan initially funded, I think the penalty makes sense. Any thoughts? Any lenders or someone with experience in this situation have any input?

[Charlie Fitzgerald]

I agree with seeing if the sellers will cover your lock extension fees.  If they won't, I would withdraw my loan application with your current lender immediately, make sure they give you copies of the credit report and appraisal that you have paid for, and start a new loan application with a new lender immediately.  Your current lender cannot charge you anything for withdrawing your Liam application.  Yes, if you stay with them and your lock expires and you RE-lock within a 3o day period, they can charge a .25% hit to the rate.  But you are free to cancel a loan at anytime and switch lenders.

As far as the fed raising the rates, it's likely not going to happen and if it does, it's likely not going to affect you to the extent they want you to believe.

ig you need a referral to a conventional lender that will treat you fairly, pm me and I'll give you one.

Don't get horns waggled by your current lender if your seller does not handle this.  Also, if you do stay with your current lender and extend your current lock, ask for the lock extension fees breakdown.