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Post by stampinfraulein on Jul 14, 2014 14:32:19 GMT
Long story, will try to condense:
--last October we tried to buy a house. 5 days before closing it all fell through and the house went into short sale. We kept our original offer in but had no idea how long it would take or if we would ever get the house.
--In April, we decided to refinance our current house. Still no word on the short sale house at that point and if it fell through again, we would stay in this current home and had to refi because our loan amortized this summer. If the short sale worked out, DH wanted to keep current house and rent it out (not my first choice, I wanted to sell because we won't make any money renting).
--In mid-May, the short sale finally got approved and after MUCH more drama, we closed on June 2. Have spent all the time since getting that house fixed up so we can move in. Market is HOT here so DH came around and we decided to sell the current house. Moving date is July 26, planned to list the current house August 1.
--My realtor (who shares an office with my mortgage lender) calls and informs me that since we refi-ed in April, there is a hitch. The bank wants 6 payments before we sell, otherwise they go back to the mortgage lender and go after the commission he got paid. That would mean that we couldn't list until Sept 1 and the soonest we could sell would be Oct 2. We would still be responsible for the Aug, Sept and Oct mortgage payments. If we sell before those 6 payments, there is no penalty to us, however.
--I feel like this puts us in a terrible position. We could list it on Aug 1 anyway and say "hey, it's just business" and penalize the mortgage lender, someone who has become a friend to us. He helped us out a lot with the short sale deal because there was so much drama there at the end. We are in neighboring church congregations and will definitely see him again, not the least because he shares the office with our realtor.
--On the other hand, paying $1800 x3 months for an empty house is definitely a strain on our finances, plus we take a risk that the market will cool in those 3 months and we may not be able to get as high a selling price as if we did it now.
--Peas, I could use some advice. Is it just business? Am I making it too personal? Or should I try to find a way to get it to work out? If our mortgage guy was just some stranger, I wouldn't be having this moral dilemma. It's because he has become a friend that I'm having such a difficult time figuring out what to do.
My husband is deployed overseas and I'm at home with 3 kids under 9, one of whom is an infant who still doesn't sleep through the night. The new house has taken an incredible amount of work and $$ to get ready. I'm overseeing everything by myself and my stress level is at a 10 so my decision-making abilities aren't at their peak right now! I could use some perspectives other than my own.
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Post by mikklynn on Jul 14, 2014 14:48:06 GMT
I would call the friend/broker and see if he can help you find a way around it. I'd tell him I don't want him to lose money, but I can't afford 3 more house payments.
Good luck!
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Post by shevy on Jul 14, 2014 14:50:00 GMT
What a mess! I think it's poor business that the realtor even told you about it. A
re you friends in the sense that you talked back and forth during the process or are you friends in the sense that you have lunch and dinner and spend time talking about things other than the process? If it's the first one, I'd say too bad. You need to do what's best for you.
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Post by Lexica on Jul 14, 2014 14:56:32 GMT
I don't understand why the bank would go after the commission of your mortgage banker or require 6 payments from you. That part doesn't make sense to me. I haven't had my coffee yet, so I'll drink it and see if I can follow your story.
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Post by shevy on Jul 14, 2014 14:58:33 GMT
I don't understand why the bank would go after the commission of your mortgage banker or require 6 payments from you. That part doesn't make sense to me. I haven't had my coffee yet, so I'll drink it and see if I can follow your story. My guess is that it prevents the bank from brokers who facilitate refi or sales with the idea that they get paid commission and then the home is refi'd again. |
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Judy26
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Post by Judy26 on Jul 14, 2014 14:59:40 GMT
I think you should be upfront with both and explain the situation. Maybe there is a way around the situation. If not, they will know that you tried but that is a huge amount of money to loose just to be nice. And it is possible that the timing will work out anyway.
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Post by Lexica on Jul 14, 2014 15:00:45 GMT
Is this standard banking process? When you did the refi, was that in the paperwork you signed, that you cannot sell within 6months of a refi?
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Post by stampinfraulein on Jul 14, 2014 15:02:31 GMT
I don't understand why the bank would go after the commission of your mortgage banker or require 6 payments from you. That part doesn't make sense to me. I haven't had my coffee yet, so I'll drink it and see if I can follow your story. My guess is that it prevents the bank from brokers who facilitate refi or sales with the idea that they get paid commission and then the home is refi'd again. I think it's something to do with this. Sort of a fraud-prevention measure. As for what kind of friendship we have with mortgage guy, I wouldn't say we go and hang out together but we are definitely friendly and would stop and chit chat if we ran into each other around town and we enjoyed visiting when we were in his office doing business. DH just sent back cool embroidered hats for both the realtor and mortgage guy from Afghanistan. Again, we have a church connection as well. Don't see each other on Sundays but we are in neighboring congregations and each have mutual friends in both congregations. |
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Deleted
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Oct 5, 2024 13:13:55 GMT
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Post by Deleted on Jul 14, 2014 15:04:04 GMT
IMO you are making it too personal. Do what is best for your family. Even though it is probably unethical and illegal I'd possibly make an under the table cash offer to reimburse him some of this lost fees (or all of it depending on how much) He knew at the time you re-fied that this could happen. If he wanted to protect himself he could have passed your refi off to someone else.
Or you maybe you could work with someone else on the new house.
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Post by stampinfraulein on Jul 14, 2014 15:04:05 GMT
Is this standard banking process? When you did the refi, was that in the paperwork you signed, that you cannot sell within 6months of a refi? Honestly, I don't know the answer to that second question. It might have been, I don't remember. Would have to go find the paperwork and look but when realtor told me last week, it definitely came as a suprise! |
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Post by ~Zoey~ on Jul 14, 2014 15:08:06 GMT
I don't understand why the bank would go after the commission of your mortgage banker or require 6 payments from you. That part doesn't make sense to me. I haven't had my coffee yet, so I'll drink it and see if I can follow your story. I'm on my first cup of coffee and I still don't understand. However, I'm neither a realtor nor a mortgage broker, but one thing I do know is that there is no way I could afford to just throw away that amount of money. I hope you can work something out because right now it seems like a lose-lose. I would think that your broker would be aware that something like this could always be a possibility. He was aware you were trying to buy a new house when you re-financed, right? I hope someone here can be of more help.  |
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Post by sisterbdsq on Jul 14, 2014 15:15:51 GMT
Even though it is probably unethical and illegal I'd possibly make an under the table cash offer to reimburse him some of this lost fees (or all of it depending on how much) And if her state requires licensing, he could lose his. Then she can pay for his personal mortgage when he can't find a job. Win win! 
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Post by stephofalltrades on Jul 14, 2014 15:24:11 GMT
I think it is unprofessional that he came to you with his loss of commission issue. This is not your issue as a client, its internal with his business and they should have foreseen it in your circumstances. I would list the house as planned, there is no guarantee it will sell right away so there is still a chance he will get to keep commission.
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TankTop
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Post by TankTop on Jul 14, 2014 15:29:39 GMT
Did he do the mortgage on the short sale? If so, he made money off of that deal too. I would be upfront with him. He might know some way around it, regardless, I imagine e he knew this whe. He helped you with the latest purchase.
Something doesn't seem right to me though. If this "rule" is true, who would ever work with flippers?
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Deleted
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Post by Deleted on Jul 14, 2014 15:30:02 GMT
I would list. You don't know how long it will take to sell even in a hot market. However, keep in mind that you will be paying August mtg. at least, because even if you get an offer that first day that you accept, closings usually take an average of 30 days. So chances are you will be paying Aug. and Sept. Even if you get an offer in the first few weeks.
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Post by anonrefugee on Jul 14, 2014 15:37:31 GMT
If I understand correctly you're not obligated to fix this, but you don't want to create hardship for the other guy? And your family business plan requires you to sell the house?
First, don't do anything under the table!
Second, i think it's his cost of doing business. He got a commission on your new mortgage, right? And you've probably referred others to him, or will. Sounds like he knew you planned to sell if all goes right.
For all you know a disaster could strike and you couldn't sell the house as needed if you waited- plus you've wasted three months payments keeping it empty. Get the dang thing on the market, and try to get the new buyer to go through him. He'll recoup commission then.
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Deleted
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Oct 5, 2024 13:13:55 GMT
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Post by Deleted on Jul 14, 2014 15:38:21 GMT
I would call the friend/broker and see if he can help you find a way around it. I'd tell him I don't want him to lose money, but I can't afford 3 more house payments. Good luck! This is what I would do as well. He may even tell you that it is just business and he doesn't want YOU to be so significantly impacted on his behalf. Here's hoping anyway  |
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Post by anonrefugee on Jul 14, 2014 15:41:20 GMT
Did he do the mortgage on the short sale? If so, he made money off of that deal too. I would be upfront with him. He might know some way around it, regardless, I imagine e he knew this whe. He helped you with the latest purchase. Something doesn't seem right to me though. If this "rule" is true, who would ever work with flippers? Here at least - houses being flipped have higher interest loans and different conditions, more like a business loan than a primary residence mortgage. And if buying at a foreclosure auction you go in with total amount- paying it off at one time, so there is no mortgage. |
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Deleted
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Post by Deleted on Jul 14, 2014 15:50:18 GMT
Sorry, it's just business. Do what you is best financially for your family. People who choose to work in commission-based fields know things like this can and will happen on occasion. They accept that risk when they decide to go into the field.
It was highly unprofessional of the realtor to bring it to you IMO.
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Post by Kelly_MR on Jul 14, 2014 16:07:07 GMT
I would call the friend/broker and see if he can help you find a way around it. I'd tell him I don't want him to lose money, but I can't afford 3 more house payments. Good luck! I would try this. Your family finances come first! |
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Post by Skellinton on Jul 14, 2014 16:10:10 GMT
No way would I throw away 5400 so this guy wouldn't lose a part of his commission. You are right in sAying you don't know how the market will be on 3 months, it may take 3 months to sell it. It may sell in 24 hours, but you don't want to miss a potential buyer because of a guy you would chat with if you ran into him might be affected financially. He is still going to make money,he works on commission, he will be fine. 5400 is a lot of money! You could use that to pay down your principal, add to college funds, add to your retirement or savings, and buy a heck of a lot of groceries! Please don't feel badly, and list the house.
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scrappammie
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Post by scrappammie on Jul 14, 2014 16:13:45 GMT
When you did your refinance: Did you refi with intent as owner or non-owner occupied (since you were under contract to purchase the short-sale) ? Do you know your LTV? Did the loan have a prepayment penalty? (Because that's what the interest from those six payments they're asking for really should be called.) Were the mortgage lender and realtor aware of your indecision regarding keeping or selling home? -- this, most likely, is what they're worried about - in addition to your realtor having to cough up some of his commission. With a little more info, I'll know better as to whether we're talking just business. pam |
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Post by bianca42 on Jul 14, 2014 16:15:53 GMT
I would probably just list it August 1st like you planned. I'd probably let the guy know to see if there is anything that can be done to avoid it. There is a chance that your house won't sell immediately anyways...so it might be a non-issue.
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Post by JustCallMeMommy on Jul 14, 2014 16:27:01 GMT
Are you using the same mortgage broker for the mortgage on the new house? He is probably going to make more off that deal than the refi. I also don't understand how the refi dates have anything to do with when you are allowed to list the house. It could take 3 months to sell or closings and such could push closing out that long. I think you just move forward and hope the timing lines up.
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AmyS
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Jun 26, 2014 3:16:46 GMT
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Post by AmyS on Jul 14, 2014 16:37:18 GMT
I don't understand. Your realtor got a commission when you refinanced the house you're living in? I can't imagine he would have really had to do that much work to get that commission. I'm not sure why a realtor would need to be involved in a simple refinance, but it's been a long time since we refinanced ours, so maybe I've forgotten.
If you list the house with him, won't he get the commission from that sale? So wouldn't things sort of even out?
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Loydene
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Post by Loydene on Jul 14, 2014 16:45:58 GMT
When you did your refinance: Did you refi with intent as owner or non-owner occupied (since you were under contract to purchase the short-sale) ? Do you know your LTV? Did the loan have a prepayment penalty? (Because that's what the interest from those six payments they're asking for really should be called.) Were the mortgage lender and realtor aware of your indecision regarding keeping or selling home? -- this, most likely, is what they're worried about - in addition to your realtor having to cough up some of his commission. With a little more info, I'll know better as to whether we're talking just business. pam These are the questions I had --- who knew what and when they knew it. With knowledge by all parties, business decision prevails. |
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JustTricia
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Post by JustTricia on Jul 14, 2014 16:51:28 GMT
I agree with the above that said call and tell him you'd like to work out whatever you can, but you can't afford to throw away $5400.
You said it was the realtor who told you. Either the mortgage broker asked the realtor to get involved (bad business) or maybe the realtor took it upon themselves and the broker knows nothing about it and would be mortified that you know.
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momto4kiddos
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Post by momto4kiddos on Jul 14, 2014 16:57:27 GMT
might this all be a non-issue if you close on your house a couple months down the road, which is the most likely scenario. Even if you list it on 8/1, you won't likely close until some time in Sept/Oct. At that point the you're close to the 6 month mark.
I also wonder whether he did your new mortgage, did he know that you could possibly sell, etc?
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Deleted
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Post by Deleted on Jul 14, 2014 17:04:34 GMT
The more I think about this, the more annoyed I am. To the point that if I were in your shoes, I don't know that I would work with either of them again. It is just SO inappropriate for either of them to be encouraging you to put THEIR best interests ahead of your own.
You should feel NO guilt and should think long and hard about whether or not people who behave this unprofessionally are really the kind of advisors you want on what are probably the biggest financial transactions you make.
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Post by sincity2003 on Jul 14, 2014 17:19:19 GMT
Does your loan have a prepayment penalty? Also, Section 6 of your Deed of Trust (Mortgage) likely contains an occupancy clause, stating you must occupy the residence within 60 days of closing, and remain in the property for 12 months, unless special direction from the Lender. I know most Lenders have rules about houses that are recently/currently listed during a refinance..did you ever have your house listed while doing the short sale? My concern is, you refinanced as an owner occupied property, which comes with higher LTV limits/lower interest rates, but then within a short period of time you've purchased another owner occupied property, receiving higher LTV limits/lower interest rates, and these are things lender's really look at right now and try to track back to brokers and basically punish them by taking their commission.
I don't know what advice to give you; I just wanted to throw out there what the broker is likely facing.
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