Special offer

Beware of National City Mortgage's "Pre-Approval Commitment"

By
Mortgage and Lending with Sterling Home Mortgages 129359

I own a mortgage company so was not too easily fooled when my home buyers provided me with a Mortgage Commitment, that took 10 weeks to get, so it would be the real thing I was told.  The borrowers were trying to "boost their credit scores to obtain a better rate"....or something...The mortgage rep is a bit shady.

Below is what I received (personal info removed) on the mortgage commitment deadline date, at 9 pm, after reminding the mortgage loan officer several times that the commitment was due.  He screamed "IT'S FRIDAY NIGHT, BLAH BLAH BLAH!"  Such dedication! 

__________________________________________________________________________________________
 MORTGAGE COMMITMENT-  NATIONAL CITY MORTGAGE

Please review the following conditions of your loan approval:

[x] 1. This pre-approval is subject to a loan amount of $394,200, loan to value of 90, and payment amount of $438,000.
__________________________________________________________________________________________

After repeated calls to his supervisors, I was finally told this is "not a commitment, it's a pre-approval commitment".  Isn't that an oxymoron?!  They said the borrower may not yet qualify for the mortgage and are hoping to soon but could tell me no more.  I was relived to receive somewhat of a straight answer finally. 

This does not fulfill the terms of the sales contract. 

Since my buyers are stated income, this is all they can provide, no other lender can help, they won't allow me to help, and the mortgage lender refused to remove "pre-approval", I am putting my house back on the market. I will likely lose money now due to being in a rush to sell due to this unethical loan officer.   Still...cut my losses! 

I feel providing a Pre-Approval Commitment as a Commitment is deceiving.  When these borrowers can not get a loan and surprisingly to the seller, who thought that had a mortgage commitment, bail on the deal at the last minute, that is harmful to the consumer and the public.    

Anyone else offering preapproval commitments in lieu of a commitment?   I am surprised National City's lawyers condone this.  Should I report the LO?

I wanted to give you all a head's up to look for the condition in the fine print on the commitment for "pre approval".

 

 

 

Comments (4)

Brian Luce
HomeStarr Realty Inc. - New Hope, PA
Associate Broker

Hello Christine,

Nice to hear from a "fellow local".  We're doing quite a bit of work in the Lehigh Valley.

I've seen the exact thing.  I thought to myself.  "what the heck is a Pre-approval Commitment" ???

Kind of like buying a Brand new Used Car . . .

 

Brian 

Mar 27, 2008 04:32 AM
Paul Silver
Tiverton, RI
Rhode Island full service real estate firm

I am not sure what in the quoted passage you are upset about... where is the phrase "Pre-Approval Commitment"?

In any event, one would think that this sort of shananagans would be long dead by now, given the current market...

Caution is called for with any mortgage lender these days, and yes, we too are owners of a mortgage company... 

Mar 27, 2008 04:43 AM
J Manno
Summit Realty Group, Inc. - Newport Beach, CA

 

They word it in such a way that there is always an out for the bank.

Mar 31, 2008 03:06 AM
Lew Corcoran
Better Living Real Estate, LLC - East Bridgewater, MA
Real Estate Agent, Home Stager, & Photographer

Pre-Approved Commitment? Is that the same as I'm pregnant - almost? Just wondering....

Which brings us to another point. You negotiate an agreement, and take the house off the market - only to find out much later on that the buyers aren't really qualified to buy the house. (A Pre-Approved Commitment is NOT a commitment!) When you have a purchase agreement, why not a proviso that the house stays on the market for back-up offers until such time as a mortgage commitment is received by such-and-such date. If you don't have a bonafied tried and true tested mortgage commitment by such-and-such date, then you're out of the deal, here's your money back. Goodbye. Don't let the door kick you in te ass. On to the back-up offers.

Something I will think about the next time I sell my house.... 

Apr 05, 2008 01:03 PM