Q: We have a home that is under construction and we are weeks away from completion.
My lender was bought by one of the big banks. I’ve been told that the loan my original lender agreed to may no longer be available. Needless to say, we’re in shock. This is a jumbo loan and we’re already locked in at 6 percent. In addition I did have the option float down the interest rate one time before we closed. Now I am told that I no longer have that option and if I do exercise that option I would have to re-qualify for the loan again.
When I applied for the loan, I was also told that no matter what the appraisal comes back I was protected. Now I am told that is no longer the case and if the appraisal does not come back at 75 percent loan-to-value, I would not be able to close on my loan.
I cannot begin to tell you how much stress this has caused my family. We have never been late or delinquent on our home loans. We have done everything right. Unfortunately we still have not been able to sell our existing home and have watched our property value drop along with the market.
Most of the programs I see from the Obama administration do not help someone like me who has a jumbo loan. I need some advice, and feel as though we’re being taken advantage of.
A: The problem with today’s mortgage market is that you’re dealing with quicksand. When lenders buy other lenders, they sometimes discontinue the loan programs. If you try to make changes, other loan officers have confirmed for me that they require a borrower to re-qualify under the new loan terms. (In fact, some lenders expressly tell borrowers not to make any changes, since their old loan terms are better than the new loan terms they now have to sell.)
A written commitment from your original lender would help your case here. If you have a written commitment from your original lender, you should contact the corporate offices of the lender who bought your original lender. Talk to someone at the vice president level at the company’s corporate headquarters. You can find the contact information online.
You should also find a real estate attorney as soon as possible to go through your loan documents and assist you in figuring out your legal strategy.
If you or your attorney can’t make any headway with the corporate offices, you or your attorney should contact your state department of consumer finance, the state agency that regulates mortgage lenders in your state, the FDIC and your U.S. Senators. Be sure to let your lender know that you are taking this to the next level.
You’re being treated unfairly and you’re right, there is no help for those with jumbo loans under the Obama plan, unless you live in a pre-designated high-cost area, like San Francisco, New York, or Los Angeles.
As a backup plan, please start talking to other lenders – which probably isn’t what you want to do right now, but is something that I think you should pursue.
May 6, 2009