Expert: Doug Walker - 6/11/2009

Question
Hello,
My wife and I have been trying to close on a house for quite
a while now.  Let me tell you our story and please tell us
if there is anything we can do about it, or if we just have
to sit on our backsides.

At the beginning of May, our mortgage broker offered us a 5-
day underwriting at 5.5% or a 7-week underwriting at 5%.  
Considering we had to move fast because our contract was
good only through the next 3 weeks, we had to take the
higher interest, shorter-term underwriting.  Our supposed
closing date came (May 21) with no luck.  Our mortgage
broker said they need a few more days.  So we 'extended' our
contract through June 3 just to be safe.  June 3 came and
passed with excuse after excuse why they have not finished.  
So we had to extend again.  Not too big of a deal because we
are almost there!  We extend to June 10.  On June 9th, they
pushed it to June 11th.  On June 10th they pushed it to June
12th.  Now, it is June 11th and they 'claim', yet another
excuse, that their computers were down a little bit this
morning.  It had to wait until next week because the closing
agency maintains a two-day lead in following approval.  As
of right now, there is still no word on whether the agency
is even finished.  What's more is that they closing has
moved to next week with no date attached!

Please help us find an answer.  Is there any way we can put
our foot down and say 'enough is enough'.  This is a 5-day
underwriting (that we are paying quite a bit extra for) that
is nearing 5.5 and 6 weeks.  The 7-week underwriting would
have saved us thousands over the life of the loan, and yet
it still looks like we are going to hit that mark AND pay
the higher interest.

Keep in mind that it was two different companies that
offered us either loan type, not one.  

Thanks so much for your help!
Jim L.

Answer
Jim,

Your tale of loan delays is unfortunately very common.  You have plenty of company when it comes to contract extensions caused by the lender.  However, yours seems to be a little more extreme and I don't like they "fuzziness" in the answers you have been getting.  

The idea of getting a better rate if you gave him more time is ridiculous.  The only way I would see truth in that is if he brokered your loan out to a discount lender who is lacking on customer service versus doing the loan with a lender offering a little higher rate who can get it done quicker.  Even then the difference should only be .125% or .25%.

If they are having trouble getting you approved - they should have figured that out weeks ago.  If they are too busy to close loans on time they need to be honest and tell you the realistic times frames they need for each step.

The rates have gone up quite a bit since you started the loan.  If your rate was not locked, they may be trying to stall the closing to see if the rates come back down to deliver what they promised.

You either need firm answers or a closed loan.  If neither of those have happened by now - start with another lender, but let them keep going just in case....

Doug