I've been working on a refinance with New Penn Financial since the middle of November. Signed a rate lock with them on November 14th for $170,000 refinance at 3.125% for 30 years. Credit scores in the high 700s and great credit history. Wife and I both work, income around $125,000 per year. Appraisal done first week of December and said house (primary residence with 36 wooded acres) was worth $433,000. Closing delayed due to a paper foul up on their end. Continually reassured by loan office (Cody Greene) that everything was on track for closing after the first of the year. Then yesterday, he called to tell me "underwriting had rejected the appraisal" because the comp properties had less acreage". Given the appraised value ($433,000) and the loan amount ($170,000) this doesn't make any sense to me.
I been following the mortgage thread here for a year and Zillow had good reviews for New Penn, but it seems they are just walking away from their loan commitment. Has anything like this happened to anyone here? Do I have any recourse?
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BenH
Dismembered Member
posted: Jan. 9, 2013 @ 10:31a
A rate lock isn't the same as a guarantee for the mortgage is it? It seems like the only commitment they made was to honor a particular rate while the loan was being processed. After processing you were denied. Had they given you the mortgage and not honored the rate - that would be a different story.
As far as why they declined you - it sounds like the people you are working with are screwing around (as you say they had a paper foul up that prevented closing). I would just pursue to either get an answer that makes sense to you (they are going to do that better than anyone here) or until you can get them to pass it through. Get through to "Cody's" supervisor, and/or write a letter to the corporate loan office.
Otherwise - 'ef 'em - go to another company that doesn't screw you around. Will it be that hard for you to find a similar interest rate now?
Refractometer
New Member
posted: Jan. 9, 2013 @ 10:39a
Thanks for the response. I can probably find a similar rate, but I'll be out the $500 for the appraisal fee and rates have crept up a bit. I've got a call into the supervisor now.
samiam68
Senior Member
posted: Jan. 9, 2013 @ 11:00a
If they have any physical presence in your state, take them to small claims for the cost of the appraisal plus some buffer amount. Chances are, they'll settle and pony up the dough just to avoid legal fees.
vegas4x4
Senior Member
posted: Jan. 9, 2013 @ 2:45p
I would think your lender needs to get on the phone with the appraiser and get them to make whatever adjustments need to be made to accept the appraisal. If the comp properties the appraiser used have less acreage then the appraiser needs to use new comps (if they exist) or an adjustment needs to be made to the value accordingly.
The lender tells the appraiser upfront what their requirements are, usually something like 3-5 sale comps within 1/2 mile within 3 months. Not all appraisals can meet these requirements. They do the best they can and explain it to the underwriter.
Bottom line, the lender ordered the appraisal. I don't see how they can just walk away from the appraisal and say "it's no good", they ordered it, they charged you for it, they need to make it good. If the new value is lower and causes you not to be able to get the loan (170k loan on a 400k+ property shouldn't be an issue) then that's a different issue.
Marlin1975
Senior Member - 2K
posted: Jan. 9, 2013 @ 2:56p
Did you or them choose the appraiser? If it was them then call back and tell them to find someone else but they need to pay or move forward as is. Make sure to follow up all phone calls by e-mail just in case you want to take to small claims court. i.e per our phione call you are going to do XYZ...
henry33
Senior Member - 1K
posted: Jan. 9, 2013 @ 3:01p
Marlin1975 said: Did you or them choose the appraiser? If it was them then call back and tell them to find someone else but they need to pay or move forward as is. Make sure to follow up all phone calls by e-mail just in case you want to take to small claims court. i.e per our phione call you are going to do XYZ...
Just an FYI, the bank always chooses the appraiser. Or rather they choose an appraisal company who assigns the appraiser. They're supposed to independent 3rd parties. And it doesn't really make sense based on the loan amount, have the appraisal redone, even if it comes in at 400k, they should still approve a 170k loan because they probably go to 70 or 80% ltv at the same rate and you're way below that.
tploftus
Member
posted: Jan. 9, 2013 @ 3:40p
The New Penn did choose the appraiser. This whole thing makes no sense to me. Maybe rates moved against them (though they haven't moved much since Nov) and they're trying to avoid the loan? Other than incompetence or simply bad faith on the part of New Penn, I have no explanation and can't get one from them so far.
Excellent recommendations about going to small claims and also about documenting the conversations. Thanks everyone!
wfay
Prolific Poster
posted: Jan. 9, 2013 @ 9:39p
Refractometer said: I've been working on a refinance with New Penn Financial since the middle of November. tploftus said: The New Penn did choose the appraiser... I have no explanation and can't get one from them so far... Excellent recommendations about going to small claims and also about documenting the conversations. Thanks everyone! Alt id much?
okashiraaa
Senior Member
posted: Jan. 9, 2013 @ 9:45p
wfay said: Refractometer said: I've been working on a refinance with New Penn Financial since the middle of November. tploftus said: The New Penn did choose the appraiser... I have no explanation and can't get one from them so far... Excellent recommendations about going to small claims and also about documenting the conversations. Thanks everyone! Alt id much?
wfay said: Refractometer said: I've been working on a refinance with New Penn Financial since the middle of November. tploftus said: The New Penn did choose the appraiser... I have no explanation and can't get one from them so far... Excellent recommendations about going to small claims and also about documenting the conversations. Thanks everyone! Alt id much?
If you want to screw them back, close on a new rate, and then exercise your 3 day right of recision.
taxmantoo
Ancient Member
posted: Jan. 10, 2013 @ 6:57a
Let me get this straight.
They're unhappy with the appraisal because your house has more land than the comps used in the appraisal and they're afraid your house is worth more than the appraisal?
Refractometer
New Member
posted: Jan. 10, 2013 @ 2:37p
I spoke with the supervisor yesterday. He explained that it was not the amount of collateral that was the problem, but that the New Penn underwriters were worried that Fannie Mae wouldn't be willing to buy the mortgage when New Penn wanted to sell it on to them because of the extra acreage. This story at least makes some sense, although initially when I'd brought the acreage question to the attention of my loan officer at New Penn, he checked with their underwriting people and then assured me the acreage wouldn't be a problem for them. Obviously he was very wrong or they later changed their mind. I'm still waiting to hear back from the supervisor on the exact status of my situation.
Refractometer
New Member
posted: Jan. 10, 2013 @ 3:38p
Spoke to the supervisor today. New Penn won't do the loan, but will refund the appraisal fee. So I guess that's that. Thanks for all the advice.
vegas4x4
Senior Member
posted: Jan. 16, 2013 @ 11:50p
Well at least they refunded, still a pain, but that's about the best you can hope for.
Thanks for the follow up.
Refractometer said: Spoke to the supervisor today. New Penn won't do the loan, but will refund the appraisal fee. So I guess that's that. Thanks for all the advice.
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