Comments on: Mortgage Refinance: Closing Process Explained

By: Nancy

Nancy — Thu, 29 Dec 2011 16:01:15 +0000

We decided to try refinancing with an online company and it has turned into a nightmare. Do we have any options at this point? Our current issue is that our loan was not funded until 12/22 but as of this morning neither our mortgage with Bank of America nor our HELOC with PNC have been paid off. I have requested pay off information from our loan officer. Our right to rescind expired on the 17th. Here’s a few of the gory details.

12/12 1st closing. Errors: 1) Closing costs overstated by over $2300 2) Most of documents dated 12/14 and 3) Loan amount sometime $235K, sometime $237K. Instructed by loan officer to complete closing and that corrected HUD documents would be emailed to us to sign.
12/14 Since we still had not received corrected HUD documents after multiple emails & phone calls, we emailed that we were planning to rescind our loan at noon on the 15th if we had not received corrected documents.
12/14 After receiving our email about rescinding the company re-schedule the notary for very late at night Issues: 1) Additional $1500 charge added to HELOC payoff, 2)Documents now dated 12/13 and 3) not all the documents we signed at 12/12 closing were included
12/15 Corrected HUD emailed with $1500 charge removed. We signed and emailed and faxed back.
12/22 loan finally funded

By: TFB

TFB — Tue, 20 Dec 2011 16:24:42 +0000

@Jennifer – I had a similar situation happen to me once before. The old lender paid the tax but it wasn’t reflected in the records yet so the new lender had me pay again in the escrow. The tax authority got paid twice but they sat on the extra money for a long time. They said it was their policy to wait 8 or 10 weeks. Eventually they returned the money to the escrow company which promptly returned it to me.

Is this escrow company unrelated to the lender and they are just doing disbursements? Or is the escrow just part of your regular escrow held by your lender for tax and insurance going forward? What’s their explanation for not returning the money to you? Are they waiting to still pay the tax when it’s due?

By: Jennifer

Jennifer — Tue, 20 Dec 2011 16:00:55 +0000

I refinanced my primary home in September. Part of the funds to be disbursed included a tax payment. However, when contacting the tax authority I was told that the check dispersed to the tax authority was returned to the escrow company as the tax was not due and the amount disbursed far exceeded what will be due in April. The escrow company has acknowledged the receipt of the funds back into escrow but have yet to resolve the funds (financed by my loan) that are sitting in escrow. They have sat on these funds since October although I call them every week for a status of these funds to no avail?

Any suggestions?

By: TFB

TFB — Mon, 21 Nov 2011 17:48:03 +0000

@WaitingForFunding – I believe they do a 2nd credit pull and verbal employment verification during those 3 days.

By: WaitingForFunding

WaitingForFunding — Mon, 21 Nov 2011 03:41:09 +0000

Thank you for a very comprehensive overview. Im in the process of refinancing a loan. Got my clear to close last Tuesday morning, closing papers drawn late Wed and sent to Title co. We signed closing papers on Thursday morning, and were told that a three day rescission period will take into effect before funding happens the following Tuesday. The signed closing papers was overnighted to lender Thursday by the escrow officer. Im assuming that within the three day period, that they will review the papers sent by title co. Apart from reviewing the signed docs, will the lender undertake any other activities such as re-running credit, verifying employment, etc…etc.. before funding and during the rescission period? Or are we safe to say that they will fund the loan provided that they are OK with all the signed papers? I’m particularly concerned about credit report rerun since our DTI is about 4% below the threshold. The last credit they ran on me during the loan process is exactly 61 days from the funding date or 60 days from the rescission date. Not sure if ALL lenders ALWAYS re-run credit before funding…and if this could pose as an issue if my DTI change. For the folks that are reading this and have done a refi – did they re-pull credit for you the day of funding? or during the rescission period?

By: TFB

TFB — Sat, 19 Nov 2011 01:21:04 +0000

@Dazed – Yes, that’s correct.

By: Dazed

Dazed — Sat, 19 Nov 2011 00:03:29 +0000

So closing on my new date (Wed, 11/23) is as if closing on Thursday (without Holiday) correct?

By: TFB

TFB — Fri, 18 Nov 2011 18:45:42 +0000

@Dazed - Friday 11/25/2011 isn't a bank holiday. See holidays observed by Federal Reserve.

By: Dazed

Dazed — Fri, 18 Nov 2011 17:26:12 +0000

Thanks for the reply! I went ahead and scheduled for tues, 11/22 to which my LO promptly replied that closing is scheduled for 11/23, wed??? Anyway, not sure it matters at this point, but isn’t Friday, 11/25 a bank holiday too (i.e., rescission would not count that day either?

By: TFB

TFB — Fri, 18 Nov 2011 02:11:36 +0000

@Dazed – You count the days: leave 3 days after you sign for rescission. Next Tuesday is still the best day (Wed, Fri, Sat for rescission, OK to fund on Monday).