Mortgage Refinance Problems After Closing
by John in Michigan, USA
Ask Kate about mortgage refinance problems after closing because of a toilet and sink: We closed on our cash-out refinance last week. On Monday, the bank came back stating they refused to fund the home loan because they saw that the appraised value of the home was subject to the toilet and sink being replaced in the master bath.
The mortgage company representative has stated the bank could cancel the mortgage and we would have to start the process over, with the current rates available in the marketplace, which are much worse. Do we have any rights in enforcing the signed mortgage agreements? Thanks.
Kate Answers: Mortgage Refinance Problems After Closing
When an appraisal is completed by a real estate appraiser
, subject-to's are not abnormal.
In your case, your home appraisal disclosed that the toilet and sink in the master bath needed work before the appraiser could place a final signature on the appraisal.
Now normally the bank would require a final appraisal inspection to verify the work was adequately completed before closing your home loan. However (and obviously) someone overlooked the condition and your loan closed anyway. Then a post-funding review uncovered the error.
But the question is, what happens next?
Can The Mortgage Company Do This
Can a bank call back their funds for a home mortgage loan that just closed? Yes! Does it often happen? Nope!
So here's the thing. It was the mortgage company's oversight. However I'm almost sure (is that an oxymoron?) if you read your final loan documents, you'll discover a clause giving the bank the right to call back their funds in instances like the one you are encountering.
In fact, you may have signed a specific document agreeing to supply any missing documentation after your loan closes.
Pick Your Battles And Save Your Interest Rate Lock
You have the right to hire an attorney and fight the mortgage company's decision. But my advice is to pick your battles. Replace the toilet
and sink ASAP to get on with your life.
Especially to save your mortgage rate lock
John, one more thing. I'd like to hear back from you. Let me know when you get this worked out with the bank. Comment here on Mortgage Refinance Problems After Closing
. Or Ask Kate another question here
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