Loan application - Cancel or Not?

Question

Hi Folks,

I'm currently waiting on the loan to be approved from my lender.
However, the lender is moving at molasses speed and I'm approaching 60 days...just to get a loan from the bank!

Everything else is completed, inspections and other contingencies have been removed.
The sellers are getting concerned the lender will not approve my loan, and I'm getting a little discouraged as well. I've been calling and emailing almost everyday to get an update with no response from the lender for updated conditions if required.

Do you guys think it will be easier to purchase with cash and refi? I believe it will move a lot faster.

Also, if I decide to back out of the loan, am I responsible for the charges? An appraisal was completed and I believe the charge for loan origination is in there as well. I feel cheated if I am, because the service has been so terrible.

Cameron

Cameron Chew · Answer

@Mike, that's ridiculous, 5 months and in the end, lender backs out?

I've actually asked for the manager, but the reply I always get from the lender is they'll forward my concerns to the appropriate parties...and it hasn't really expedited anything. lol

So I am thinking about canceling my loan application, but only if I'm able to find the right lender. Right now, I'm having trouble finding lenders with no seasoning in California. Most are about 6 months. I need something soon, sellers are questioning why it's taking so long to get a loan for such a small amount..

Thanks for your input Mike.

Cameron

Mike H. · Answer

Not much you can do. And I wouldn't count on getting any money back if you back out.  There are absolutely no protections for consumers when it comes to lazy or incompetent banks. We are protected for rate changes and things like that but thats about it.

As far as time, 2 months is nothing. I went through a refi last year that took over 5. At the very end, after they had already gone through final conditions and we were just waiting on the clear to close, they backed out.

Some manager somewhere along the way said they were uncomfortable because the private lender was a relative. Hello???? Aren't most private lenders relatives? Regardless, this was known to them from day 1 of my application so why didn't they say something then?

All's it takes is one moron in the chain and your loan is not getting through. From what I'm hearing, there is a very high percentage of investor loans that are getting shot down and most require a call to an underwriter manager to try to get them bumped through.

It seems they all want to find something wrong with the loan - no matter how nonsensical.  That same loan, I was asked to provide proof that the security deposit was deposited in the bank. What possible purpose does that serve????? My reserves were my reserves!

The real issue is that many of the loan people today are from a time period where they didn't actually have to check anything to process the loan. Now, they're so afraid of their own shadow and have such little knowledge about what the actual guidelines are, its a pure roller coaster ride waiting to see if you can get a loan done.

I will say this. Conventional 1-4 is easy. Quicken Loans can you have done in 30 days. After that, all bets are off.

Cameron Chew · Answer

@David, I've talked to the local bank and they don't really have push.

I have entered a complaint and it's been forwarded to the appropriate parties. Other than that, I'm not sure what else to do other than continue my path of pestering them ears for answers/updates.

I'm looking into it at the moment!

I'm concerned the sellers will say 'see ya' if I don't get answers soon... I've already let them know what's going on, but this has been dragging.

Cameron

David Wedemire · Answer

Actually it's not a refi if you pay cash. It would be finance.

David Wedemire · Answer

Seasoning just refers to how long yo must own before they will refi. Can the local California bank people help you push this along?

Cameron Chew · Answer

Group, thanks for the input.
I have been a customer with my lender for 10+ years.

What's weird to me is that I'm dealing with people from Michigan when I live in California...and these are people my local branch got me in contact with. The time difference makes it a little bit harder to communicate since they'll be leaving work sooner.

What's frustrating is the communication. There is non.

Conditions weren't asked from me until about three weeks into the loan application, and I've been calling and emailing almost daily to get updates.

I've been told my application is in rush review now, but it's been a week and a half with no word of whether they need more conditions. My processor just went on vacation for two weeks! :(

I'm literally in a black hole, I have no idea what's going on.

Anyways, I'll have to read about seasoning as I'm not sure what that is. I assume it means once I buy a house, the seasoning period is the time I must wait before I can refi. I'll dig into it.

Thanks
Cameron

Don Konipol · Answer

The days of the fast loan close are over.  Your experience is not unusual, though extremely frustrating.  Going with a new lender will mean starting the process all over again.

Ann Bellamy · Answer

It's always easier to purchase with cash, although with a purchase and separate refinance, there are double sets of closing costs for some items, such as the title company or attorney fee, and the recording costs.

Will it move faster using the same bank?  Who knows?  But you may also have some seasoning requirements.

If you have a relationship with this bank, I'd go to your local rep (like a local branch manager you know personally) and discuss it and see if they can find out for you what the delay is.