Profile picture for Jonston

cancel refinance after closing

I feel very bad that I might have to cancel my refinance in recission period after I was told of my option. I want to know what will happen to my mortgage agent and appraiser? Does any of you have the experience? How often does this happen? Is there a way to make every one happy?
  • January 30 2011 - Lenexa
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Answers (16)

Your attorney is correct the only way to actually get your appraisal money back is to close and cancel during the 3 days.

Rates move up and down and have probably gone up some since you locked so before I would cancel anything I would make sure of what can be done and have it be with someone you trust this time.
  • January 31 2011
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Profile picture for Chris Corica
Jonston - No, you are not going to make everyone happy. If you rescind now your current loan originator will likely be upset and rightfully so. If you didn't like the terms of the loan, you should not have moved forward in the process. It is all to easy for a competitor to step in at the last hour and offer a better deal. Especially if pricing is better now then when the original process started. As others have said, there is no guarantee you will end up with a better deal even if you do make the change. If the loan you closed on has the rate, terms and fee's agreed upon, the right thing (morally) is to stay put. With that said you wouldn't be the first person to jump ship looking for the next best thing. What happens when you are ready to close the new loan and another new person comes along with even a better offer? At what point do you follow through on what you start? Good luck.
  • January 31 2011
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Profile picture for wetdawgs

Good luck in your choices.

Don't be surprised if you are obligated to pay some fees such as appraisal to the screwed lender.   

Don't  be surprised if your funding with the next lender ends up more than your current.  You don't have any legally binding promises at this point, you just have vague ideas.

I hear a lot of blame on the lender for not telling you, but at no time did you mention your independent research so you could be an educated consumer.   How can one enter a huge financial decision without doing research?   Some people do more research for a washing machine.

  • January 31 2011
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When they look at your credit report under inquires, and you have to provide a letter explaning the purpose of the other lenders credit service pulling your credit report. When they ask the title co to send them the title commitment in their name. ( you are not planning on stiffing the title co, too?)  You mention rescinding "for a stupid reason like mine".... enough said.
  • January 31 2011
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I have been in the mortgage business for 33 years.  I have only had one person rescind on me.  It is disappointing but not the end of the world.  Just be aware that there may be some fees assessed for the work that has been done such as the appraisal and the title work.  

There is a reason for the rescission period.  If you don't feel this is the right thing for you, don't go through with it. 
  • January 31 2011
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Jonston,

Be real...No one will be pleased with you! Nor should they be!  They dlivered as promised and because someone may or may not deliver on a promise you are walking away.  Recind and may the green grass be spray painted! 

I have no issues when a borrower recinds because the deal they are being asked to sign is not the deal they expected.  I have a real issue with a borrower recinding on a loan that was delivered as promissed!  Walk away before the loan closes and at least the loan officer can attemt to salvage the deal!  You do it after you sign and they have no control!
  • January 31 2011
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It is your right to cancel prior to midnight of the cancellation date.
If that has not passed - just do what you feel is right. 

However, right now you have something guaranteed. Beware - of another lender pushing you to cancel. This is not an ethical pratice and you may find that what you have been promised is not what it seemed to be.
  • January 31 2011
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Profile picture for Jonston
I wish my LO has told me my option honestly right from the beginning, so I would have known when to withdraw is better. Does she need to know why? How would other LO know about this?
  • January 31 2011
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I think you know the answer and it is go forward with your commitment. I think you are probably also aware the rule was to protect consumers that got to closing and discovered they were not getting what they had expected or agreed on unlike your circumstances. In the present mortgage environment every lender may not approve every buyer, and you could be the "victim" next time.  If you do cancel and go with another lender, I can't imagine the loan officer will be real excited about doing your loan with your track record.
  • January 30 2011
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Profile picture for Jonston
But if it is not for a stupid reason like mine, then what could be the reason for recission? I just can not think of any other possibility.
  • January 30 2011
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Profile picture for SoCal Engr
You didn't do your homework upfront, now you have buyers remorse, and you want to kill the transaction and nullify everyone's efforts. And you want them to be happy too? Get real. Everyone is going to be at least annoyed with you, with a decent right to be pissed off about their wasted effort. The
 best you should hope for is that they'll be professional and not express these feelings to you.

If you're going to do, just do it. However, take at least a few minutes to verify that you're actually going to improve your refi by doing so. 1/4 point in rate is, in most situations, really not that much when you boil it down to dollars-per-month. And, with the way rates are bouncing around, consider Paul's caution that you may not find that you will really improve all that much.
  • January 30 2011
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Profile picture for Jonston
What would be the most common reason for people to back out after closing? What is the acceptable one to most LO?
  • January 30 2011
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If you back out, chances are pretty good that you will end up with about the same deal you have now anyway.
  • January 30 2011
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Profile picture for Jonston
I did not shop around before I contacted my current lender found on internet. She did not tell me that I have the option to withdraw after being approved.
So, I soon found there are other places offering better rate (0.25% lower) and fee (no fee), but I stayed. However at closing I found out I actually have the option of backing out. If I knew earlier, I would not wait till the last minute.
But I feel bad that people have put in their effort. My atterney said I will be refunded  of apprisal cost if I decide to cancel, is that true? Do I have to pay anything else? How can I make my LO feel better if I decide to cancel?
  • January 30 2011
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Maybe another Mortgage entity called you and 'promised' they would provide you a lower rate and/or closing fees then you were getting???

It happens about 1/1000 closings. The majority of the time it is due to a greedy loan rep. being called on the carpet by one that is looking to make an honest buck.  

  • January 30 2011
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Profile picture for SoCal Engr
No one is going to be very happy, so it's unrealistic to expect them to be. At best, they will hopefully understand that you had a very good reason to wait 30-45 days and then change your mind. However, that is exactly what the rescission period is for.

The appraiser normally gets paid (i.e., they've already done their work), but the LO is likely going to come up empty.

Personally, I've never had a reason to rescind a mortgage transaction. Can you share a generalized reason (don't need specifics) as to why you are going to unwind the deal?
  • January 30 2011
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