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The contract had been sent to Mike's lender and set to close 60 days later. The lender told us time frame wouldn't be an issue. A short time prior to closing, a "small challenge" presented itself, which could "possibly" delay the closing. This delay was blamed on Mike, saying he had not submitted necessary documents in a timely fashion when in fact he had done so. Mike's rate lock was nearing expiration and I asked the lender if they were going to extend the rate lock at no expense to the borrower. I was assured it would be "taken care of".
Another "small challenge" revealed itself at that time as well. Even though the property appraised for higher than the purchase price, Mike's lender wanted to see additional comparable sales within a given criteria ASAP for review by "committee". Yours truly sent the additional comps within the hour. Eight days later, the appraisal was rejected for lack of relevant comparables and we were informed that by their grace a second appraisal would be ordered and performed at no cost to Mike. During that time, Mike asked me if it was customary for a borrower to be charged for a rate lock extension when a loan did not close on time at no fault of the borrower, which was something I had never heard of. When pressed on this, the lender explained it away by saying rates had gone up considerably and Mike was fortunate to only be paying an additional half point or around $1400 to fix their screw up!
Fast forward two weeks and the second appraisal comes in, this time with a valuation a thousand dollars higher than the first. During this time, Mike's loan officer takes a week's vacation without informing either of us that he would be unavailable. Another week goes by and we are a full 90 days into the process and 30 days past the original closing date, when we were informed the second appraisal had been rejected for no specific reason and the loan had been denied!
This ordeal cost Mike his new home, three months of time and over $1000 in appraisal and inspection fees. In my nearly ten years of working in this business, I've never seen anything even remotely close to this from a lender.
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