I have applied for a 203k loan. When doing this I made my broker aware that I had an fha loan for another rental property about 30 miles away. At no time was it discussed that you cant have two fha loans in that close proximity. I was told it wouldnt be a problem. We get to a few days before closing and suddenly it is brought up that I have to refi out of my current property into conventional. I made them aware that the property would not have enough equity to do so. An appraisal is never done. Another closing is missed. They now start working toward a fanny mae homestyle loan. Go figure, there is another issue, and we miss the third closing. My seller is fed up and ready to pull out. As of today they are working back toward the 203k and refi of my current property. I have a strong feeling it will not appraise for what is needed and with closing in 5 days they are going to blow this deal. which I may not have even started the process on if I was given good information in the first place. If i fire them, i lose money on the appraisal. If the deal doesnt go through, do I have any recourse?
Hey! @Brian Ashby Sorry to hear about the issues you are running in. You don't have any recourse.
The mortgage broker is a dumb ***. There is no way in heck a 2nd FHA loan would be approved that close. Also based on what you are stating, looks like you might have bough the 1st property recently. That would be an another red flag.
As many realtors on BP have stated, too many folks run towards a lower rate, not realizing that a lower rate is not the end all, be all of getting a loan to closing. A knowledgeable, reputable mortgage banker is worth way more then the few bucks you might have saved going with the lowers rate. I am not saying that's what you did.
I got a call 2 days back from a BP member and I told her that what she is trying to do can't be done. Her argument was that an another lender has pre-approved her. Hum, let me see. Do I care that someone other numbnut approved her when she clearly shouldn't be. NO. What I care about is my reputation and giving you my honest opinion. It is then up to the borrower to make their own intelligent decision.
Sorry for the rant but had to be said, for the benefit of others. Your's is the 10 post I have read in the last few days, with something to do with the lender or realtor screwing up.
I truly hope that your issue gets resolved. Good Luck.
Were you using an agent? A knowledgeable agent would have saved you this grief by telling you about only having one fha loan at a time, and they woukd have referred you to a good lender on top of that.
Sounds like maybe you need a new team helping you reach your goals.
I do commercial real estate with larger properties. People contact me all the time for business. I work with those who LISTEN and follow direction. They can ask questions but they listen and learn.
I review buyer financials before we start working together. Even though I am not the capital markets lender and I am the commercial broker I want to know their capability and what they are trying to do.
Someone contacts me and wants to put 20% down on a retail center. I have seen that happen maybe 1 in a 100 times. it is very rare. Everything with underwriting has to go perfect and no issues with the property. 25% down is more realistic and even then might be pushed to 27% to 29% down minimum.
Why can't you simply get a portfolio lender loan? Might not be fixed for 30 years but my experience is investors rarely hang onto properties for more than 5 to 10 years anyways. At some point in the economic cycle someone comes along and offers to buy the property at a premium. The seller then 1031 exchanges into something else.
Equity and wealth keep growing. Single family houses long term you can't really scale them that much. I know some investors in their 70's that played small ball when they could have sold an traded up. Their net worth is still around 2.5 million. Then I know others over the same time grew net worth to 40 or 50 million.
If all you are out is the appraisal consider yourself lucky. What about your earnest money? Can you still back out with finance contingency?
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