203k Loan Nightmare, Help!
I purchased my first home in 2017 via a 203k Standard loan. Property needed extensive repairs. My understanding is that with a Standard 203k Loan, you do not make any mortgage payments until the rehab is complete, 6 months or so post purchase.
We are now 40% of the way complete and my lender (still holding $100k plus in escrow) wants me to make FULL mortgage payments. I have communicated to them that 1- they are suppose to have a mortgage payment reserve since I am not supposed to make mortgage payments yet and 2- how do they expect me to start paying on a fully funded loan when they are still holding over $100k in escrow. If anything, I should be paying only what I have used so far.
The contractors are pending payment and the lender won't disbursed because I haven't paid 2 months worth of mortgage. Lender stated that FHA sent a cease and desist letter, however when I contacted FHA, they confirmed, they do not get involved until guidelines have been violated.
I have documented everything and sent letters to the Lender and they are refusing to speak with me. Now I am getting calls from the Loss Mitigation Dept about avoiding foreclosure, but I have repeated I AM NOT SUPPOSED TO MAKE MORTGAGE PAYMENTS YET, MY HOME IS NOT HABITABLE AND I DO NOT HAVE POSSESSION OF IT YET. FURTHERMORE, YOU ARE STILL HOLDING $100K IN ESCROW. HOW DO YOU EXPECT ME TO PAY ON MONIES YOU ARE STILL HOLDING AND HAVEN'T YET DISBURSED? To no answer.
At this point, I have reached out to FHA and asked a supervisor to get involved because my Lender's refusal to communicate is extremely worrysome. Not to mention, I am at risk of having my contractor place a lien on my property all the while the lender wants to initiate foreclosure. My home has no windows/doors/electricity/plumbing or HVAC and to make matters worse, Lender still owes me money for out of pocket permits that I paid in order to expedite repairs and they agreed to reimburse when renovation is complete.
All I want is to complete my home so that I may finally move in. I am researching how to obtain a private mortgage since my lender is now misreporting and hurting my credit. Since my home is not complete, I cannot refinance in order to transfer to a conventional mortgage. Nevertheless, my home has increased in value despite it's current condition.
Can anyone help me out? The ideal situation for me is to obtain a loan for $300k so that I may payoff my existing lender and finish the rehab of my home. At this time, my home is worth in upwards of $500k and it is located in a up and coming gentrified area of Jersey City. Where can I go? Who should I speak to? Please provide me with some feedback if possible.