Lender didn’t close on time

[Maxine Kunimura]

I was supposed to close 12/13 with a VA loan on a SFH. I intended to turn my current home into a rental. I met all borrower obligations (submitted all documents) with my lender and the lender told me on 12/12 they would be unable to close due to not having the ‘Clear to Close'. They didn't explain why. On 12/13 (original closing date) the lender requests add'l documents that I don't have and to obtain them requires me to visit the IRS office. Nothing nefarious on my end (it's a long explanation) but I could have provided this weeks/months earlier if I had known. My PA was dated 10-21-19, and the lender had almost 60 days to close.. I still haven't received any solid information from the lender as to when they'll be able to close. We're wanting to cease working with this lender - my question is, what obligation do I have to close? I realize I would lose my earnest money and in reading the PA, which was contingent on financing, the seller could take legal action on their losses if I can't close?

I know I could work with another lender, and I’m taking this as a huge learning lesson. I’m just trying to fully understand consequences and obligations from someone with no stake in the game. Of course, I expect my realtor to push for a closing. But I’m basically wondering now if walking away is an option (due to lender’s poor performance/inability to close on time). The lender has ignored my questions as to why this wasn’t caught earlier.

I tried to provide as much info as possible. Currently I have a PA Amendment pushing closing to 12/18 but of course the lender is unable to make that. Maybe next week. The home is currently vacant and owners live in FL I believe (it was previously a rental). Thank you in advance!

[Jason Turgeon]

Every state writes contracts for real estate differently. But somewhere in that stack of stuff you signed there should be something with some dates on it and some language that says what happens if you can't obtain financing. Usually the financing date is several days/weeks prior to closing. 

Best course of action is to call a real estate lawyer and see what your options are. Don't take advice from strangers on the internet on this kind of legal matter.