Laid off after closing already scheduled, now what?

Private Lending & Conventional Mortgage Advice

Laid off after closing already scheduled, now what?

Member since 2019 · 17 posts · 15 votes

Hi y’all looking for some advice from any friendly loan Officers or other knowledgeable people.

I’m refinancing my primary residence to take advantage of lower interest rates. Everything was going fine, closing date is scheduled for next Monday and #boom I get laid off.

What do I do about it? I have not thus far and will not give any false information to the bank, but since the closing is already scheduled, is it a done deal? Does the paperwork you sign at a closing include reverifying employment?

I didn’t sign anything promising to tell them in the future if I have a change in employment, and I don’t feel obligated to tell my current mortgage company I’m laid off. Is this different?

I can ask my loan Officer, but I don’t want to mess it up if It’s a “don’t ask, don’t tell” situation.

I don’t have any concerns about making payments or bringing money to closing in the meantime.

My plan currently is to go to closing as scheduled and if they have paperwork that explicitly asks if I’m still employed, I’ll have to decline to sign it.

Bad idea?

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Matt CrusinberryPro Member

Hollidaysburg, PA · Member since 2015 · 327 posts · 350 votes

7y

@Collin Cameron, I agree that you shouldn't be saying anything about your "newly found" position. While I'm a big advocate of integrity, I don't believe you're violating anything here. You pay your bills on time, and you have a history of that; which is why you have the loan. I would carry on and go to the signing. You haven't infringed on anything, and I'm sure your new debt is only going to put you in a better position (assumption). Good luck!

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Anthony Rosa
Rental Property Investor · New York City · Member since 2019 · 703 posts · 538 votes
7y
Honesty is the best policy but maybe you can find something NOW!! The job market is excellent and refinancing buys you a couple of months until the new mortgage payment is due.
0 Reply
Tommy CangelosiPro Member
Real Estate Broker · Valdosta, GA · Member since 2017 · 45 posts · 20 votes
7y
@Collin Cameron
What state are you from?
The lender is most likely going to have you sign a form at closing stating that you haven’t lost your job and that nothing has changed with your employment. Sorry that happened to you man!! Good luck!
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Victor Vella
Flipper/Rehabber · Cleveland, OH · Member since 2014 · 173 posts · 121 votes
7y
@Collin Cameron
This is a good reminder speed makes and breaks deals. Every day counts.
Talk to an attorney, if I were in your shoes I would tell the lender.
Also If my spouse had decent credit, DTI I would tell the potential lender what's going on, delay closing and ask if I could put loan in spouses name and title in both.
Sorry for the job loss
0 Reply
Jermell Shavers
Member since 2019 · 295 posts · 159 votes
7y
@Collin Cameron. Hey it happened to me as well got laid off like a week before closing. They will re verify before you close probably the day of. If you’re honest about it just don’t do it who knows how long it will take you to find a job be upfront and just be honest
0 Reply
Rob Rothstein
Attorney · Washington, DC · Member since 2019 · 1 post · 0 votes
7y
@Collin Cameron at closing, you’ll certify numerous times that you are no more risky than you were at the time of application. Multiple docs with specifically address employment and liabilities. Even if it’s a low probably chance of occurring, getting caught making a misrepresentation could create a problem for you were it ever to come up. Nowadays, lenders often pull loans for quality control review. Possible your loan could be one of those.
If it were me, I say better safe than sorry.
Good luck with the job search, and the refi.
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David BarnettPro Member
Rental Property Investor · Cambridge, MA · Member since 2016 · 634 posts · 415 votes
7y
@Jeff Small I chuckle when people think because a company/companies did unethical things, that would give individuals the right to do something that isn't honest or ethical (which is what you insinuated in your post on this topic). It's like saying that someone screwed me over, so that means I can go and screw someone else over. I can control my ethics and integrity. I cannot control the ethics nor integrity of someone else or another company. If I don't like someone else's standards, my recourse is to not work with them or do business with them. Reputation matters and people that screw people over will eventually be found out and their business will suffer. The OP, in my estimation, should not take the reputation hit of being dishonest with the lender. He knows deep down that his situation has changed substantially and it is best for him to come clean.
1 Reply
George Clark
Lender · Dallas, TX · Member since 2019 · 28 posts · 16 votes
7y
@Collin Cameron come clean. It’s fraud. It’s Federal. If you did try to do it. they moat likely will find it anyway. In my experience we check again right before closing. It’s ok. You don’t close right now, find a job. Apply again. All is well. Best of luck!
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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
7y
Originally posted by @Gina Cardarella:
@Collin Cameron
I wouldn't say anything your covered I've never had them recertify employment right before closing and if you got it covered the expenses who cares good luck

You may not have KNOWN they recertified employment before closing, but if you were getting a traditional mortgage, they absolutely DID recertify employment.
[email protected]Podcast Guest on Show #261
1 Reply
Collin Cameron
OP
Member since 2019 · 17 posts · 15 votes
7y

Hi All, as you might imagine, it's been an interesting week: I would really like to thank the community for their collective wisdom, and I appreciate the feedback. I have been reading the responses but haven't had time to reply until now.

--The end of this story is that I called my loan officer and they cancelled the closing-- we might try again with them if I find something quickly or we might try with just my wife on the loan. Disappointing, but not the end of the world. In case anyone is curious, we do have to "start over" and our 2.75% on a 15 year fixed is no longer locked, so we'll have to start shopping around again to see who has good rates :)

I would humbly point out that in my original post, I explicitly stated that I had not and was not planning on providing false information, but was asking about what information would be requested at the closing to find out what I should do. It was unclear to me exactly what the closing documents would ask about, which is why I asked the question. I knew this was a great place to get clarity about what would be in those documents and you have collectively done a fine job providing it, which I very much appreciate. I think this point applies specifically to the very helpful responses from @Paul Defngin @Travis Brizendine @DJ M. @David Barnett @Michael Noto @Charlie MacPherson @Christopher Giannino @Ned J. @Matt Carey @Ryan Proffit @Rob Rothstein I very much appreciate you all for sharing your experience and perspective with me!

Thanks as well to those who left encouraging notes, I've had a couple interviews this week, We'll see what turns up. Perhaps we can turn my severance into the first deal :)

Ps. I feel like I should take a screen shot of the post by @Mindy Jensen on a thread I started #celebritysighting #fan

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Sharon Rosendahl
Investor · Quilcene, WA · Member since 2017 · 235 posts · 169 votes
7y
@Collin Cameron Honesty is the best policy and no looking over your shoulder waiting for a fraud charge. Good luck in finding a job. Depending what you do and where you are at it should be a quick thing. If I had seen your post a few days ago I would have recommended going to a staffing agency. Sometimes they can place you right away and sometimes mortgage companies will accept new jobs in the same field. Also, if your wife's income is pretty strong then yours would have been the bonus so being on contract could have been ok.
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