What Happens At Closing When...
Got an interesting phone call last night. I have property that I am scheduled to close in a few days. We all have settled on all the numbers. The lender has placed the funds in escrow and we are waiting on a few other insurance forms to arrive. The owner calls me last night and says that he has a major emergency and needs to close asap, he has also offered a substantial reduction in price and terms to close faster.
Now, with what the owner wants, the funds provided by the lender will cover his new asking price as well as my down payment and some of the closing costs.
I could very well go a different with the insurance and close alot sooner. My question is this:
What will happen at closing when the attorney is presented with the new settlement numbers?
Will this affect closing?
Will we have to contact the lender or what?
Don't know what to do. I am trying to reach the closing atty on his cell but have not had any luck. I don't want to contact the lender if I don't have to, and possibly delay closing.
Because a lending institution is involved, you may have to go back to them and have them redo the paperwork based on the new selling price. You also need to know if your loan will allow seller-paid closing. And in many instances, you may not be allowed to take any excess funds out of closing.
This is a tricky one. If you do not let lender know you could be committing fraud and this you do not want to do. You could work a deal under the table with the seller to give you the additional funds and just leave things as they are. I do not think the closing atty will go along with not telling the lender of the new development as he could loose his license and job all reputation. If you want to do it secretly under the table it is still considered fraud. It has been done also as credit for carpet or rehab work and placed as an expense on the closing statement. There are other ways to get back money at the closing and not bother the lender. You may confide in the attorney for some suggestions too. Very tricky. I may have confused you even more. Back in the old days it was done all the time and everyone knew it including the lenders.
Good LUCK and Thank You
Hope this helps some
Ted Jr
Contact your Loan Officer ASAP. If you went in with the new numbers and the the lender thinking it is lending on the old numbers that is fraud. Everyone in the deal will probably get jail time and heafty fines.
There is more then just you the seller and the lender involved with the closing. You may have a hard time getting the closing moved up. If it is just a few days you would be better off leaving it as is. The funds would have to be wired back and then rewired back for closing. this can take a few days in it self.
Now there are lenders that say they can close in a day. I am a mortgage broker and have never seen it though. Never tried it either. But they are available.
talk to your Loan officer and have them contact the lender and see what there turnaround time is. May be that it is not even possible.
Carl