Short version: I am 4 months into a loan refinance. I've already paid for an appraisal, which has now expired. The team I've been working with (loan consultant, underwriter, and processor) has been dragging their feet and status updates have been difficult to obtain. Their turnaround time promises have rarely been kept. I don't even ask for expected turnaround times anymore. I have no idea how close this loan is to closing, as a second property appraisal is still being scheduled. I am very frustrated at how slow this process has been and how difficult communication has been. The lender seems disorganized/incompetent/overwhelmed/slow, or all of the above. My question: Can I simply halt/terminate the refinance process and look for another lender with which to refinance? Would I be out any additional fees/charges/penalties?
Long version:
I own a SFR in Indianapolis and I live in California. Back in February, I initiated a refinance of the mortgage with my current lender. Initially, communication was brisk and turnaround time was expedient. The particular loan consultant I was assigned is based in Texas. Still, five weeks after initial contact, underwriting had approved the refinance terms and disclosures were sent to me to sign. Five weeks was a tad longer than my previous experiences with refinancing (mortgages for my personal residence), but still within acceptable range as far as I was concerned.
However, the loan amount (75% of appraised value) in the disclosures was not what the loan consultant and I had discussed (80% of appraised value). The loan consultant advised me to wait for a set of updated disclosures that would reflect a loan amount that was 80% of appraised value. A week or two later, he told me that he had been mistaken, that only loan amounts up to 75% of appraised value would be allowed, given that this was an investment property. I was okay with the smaller loan amount. However, according to the loan consultant, the original set of disclosures had already expired and I therefore needed to wait for updated disclosures.
At this point, communication became increasingly difficult and turnaround times on the part of the lender began to drag. The updated set of disclosures arrived 5.5 weeks after the first set. I did not sign them, as I noticed various mistakes that the loan consultant agreed needed to be corrected. He said a corrected set of disclosures would be sent out to me within days. It's now been over two months, and still no update disclosures. In that time, I've needed to resubmit updated pay stubs (which I did within 24 hours of request) and am now in the process of scheduling a second appraisal since the first has since expired. The lender has agreed to foot the cost of this second appraisal and has agreed to hold the agreed upon interest rate at no cost to me. I've also stated my expectation that any double work (underwriting, processing, etc) as a result of the lender dragging out this process should not be paid for by me.
At this point, I'm ready to just stop this refinance. Status updates require multiple inquiries on my part to obtain. Even then, the updates are vague and filled with excuses for the delays experienced. Virtually ever turnaround time given to me has been exceeded by days, sometimes weeks. I'm totally exasperated and want out.
My questions are:
1) A loan refinance should reasonably take this long, should it? (I've been consistently expedient in turnaround requests for documentation -- usually within 24 hours -- and most of these past 4 months have been spent with me waiting on the lender.)
2) If I stop this refinance, would I be legally obligated to pay for any of the work done (underwriting, processing, etc.) other than the first appraisal?
3) How do I terminate the refinance? With just a simple email stating my intentions not to move forward?
Thank you!
