Let me preface this with this is not my lending institution nor are these my buyers.
Of the properties I have under contract two are my listings that the buyers are outside agents each going thru the same Lender. They are both Rural Development loans.
I spoke with all parties upfront about the importance of getting these files approved through underwriting to lock up the RD money since everyone knows it is running out quickly.
In Louisiana, we did get extra funds due to Katrina hurricane. Well these funds ran out yesterday!
I was emailing the lender to check on the closing date and time on one of the files and was not getting a response. Then low and behold I just heard from the owner of the company to give me an update.
He is advising me that the file is approved SUBJECT TO RD RECEIVING FUNDING! He did not get the file in to RD in time to lock up funds. Which got me to thinking....what about the other file. So I ask him about that one and it's in the same position!
My question is why would a lender accept applications, process loans, spend buyers money with the HOPE that congress will extend RD funding??? In addition, alot of the files he has are first time buyers, YEP they will also not be able to get the first time home buyers credit.
Some of the applicants he stated he will be able to flip over to a FHA loan, he will just need 3 week extensions to make it happen.
As far as the properties I have listed just so you know, one I have a cash buyer in the wings waiting, so it will be okay and close quickly.
The other....yep corporate owned foreclosure and we have another buyer for it as well.
So why am I so furious?? The injustice of it all! If you have a buyer that is ready willing and able to go FHA and you know that RD is running out of money, why would you chance it?? Is it b/c it puts more money in your pocket or what?? I don't undersand. Not only that but it might have freed up money for families that RD was their only option (had he got them in quick enough).
Well, I called Missy Coffman at Red River Bank, my lender of choice to see how she faired through all of this. Happy to report that she was able to get 100% of her files approved and funded! She said they had to work like dogs, processed some within 1 week to make it happen, but she knew that's what she had to do to lock up the money! She is so fantastic and always does a great job! Congrats to Missy and her staff!
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