We used Approved Funding for a loan on an apartment at the Edge and are unhappy with the experience. Approved Funding repeatedly issued rate locks and commitments with tight expiration dates, then had the processing drag out on their end beyond these dates. Although we responded promptly to every request, the process took over three months and we had to settle for a rate 0.625% higher than... [more]
We used Approved Funding for a loan on an apartment at the Edge and are unhappy with the experience. Approved Funding repeatedly issued rate locks and commitments with tight expiration dates, then had the processing drag out on their end beyond these dates. Although we responded promptly to every request, the process took over three months and we had to settle for a rate 0.625% higher than originally promised.
Here is the timeline of our experience:
October 8: Received contract from the Edge and given contacts for their preferred lenders, Approved Funding and Met Life.
October 26: Signed contract and received quotes of 4.125% from Approved Funding and 4.25% from Met Life. For the sake of a mere 0.125%, we chose Approved Funding and the painful process began.
October 29: Received application with rate quote at 4.125% and closing date of December 2.
November 5: Submitted application including rate lock at 4.125% and credit card authorization for rate lock fee of $695, to be refunded at closing.
November 12: Told “expect to have the conditional approval next week”.
November 18: Told “expect the commitment today or first thing tomorrow”.
November 29: Closing is adjourned without a new date.
December 7: Received commitment letter with 4.125% rate and expiration of December 31.
December 15: Told not to schedule a closing yet.
December 30: Told “waiting on one item from the Edge which is the fidelity insurance other then that everything else is cleared”.
January 5: Approved Funding office phone number stops working.
January 7: Told that due to the expiration of paperwork associated with the Edge that the rate lock no longer applied and that we have to decide within hours to lock in a 4.75% rate or go with market rates at the closing.
January 10: Received rate lock at 4.75% expiring on January 21.
January 11: Told “we should be a go for clearance any day now”.
January 19: Received new commitment letter with 4.75% rate and expiration of January 27.
January 20: Confirmed closing date of January 27 and told rate lock extended at no extra charge.
January 27, 10am: Seller’s attorney cancels closing due to snow.
January 27, 11am: Approved Funding says extending the loan will cost 0.125% for 10 days.
January 27, 12pm: Seller’s attorney is convinced to proceed with closing.
January 27, 6pm: Finally closed and will never have to deal with Approved Funding salespeople again!
By the way, the $695 is not really refunded at closing, it’s just a pre-payment of the underwriting fee.
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Response by streetsmart
almost 15 years ago
Posts: 883
Member since: Apr 2009
I beg to differ with you. The $695 underwriting fee has to be paid and they did not collect that fee at closing.
I don't know what expiration of paperwork means, can you explain. And ask them to explain what happened. They have to be accountable.
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Response by inonada
almost 15 years ago
Posts: 7952
Member since: Oct 2008
The timing of the dragging things out is suspect given what was happening with respect to interest rates. Do you have evidence that they were the source of these delays, and if so, do you know if you have any legal remedies? FYI, the value of the loan you got stuck with is in the range of 5-15% less valuable than the one you thought you were going to get and/or lock in, depending on how you count. If I were you, I would explore my legal options as this is not an insignificant amount of money.
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Response by crazybuyer
almost 15 years ago
Posts: 13
Member since: Sep 2010
I'm not exactly sure what the edge paperwork was as it was explained in a very unclear way over the phone and not in writing. Something about FHFA or Fannie May.
Regarding the $695, on the good faith estimate, there is only a single item
Underwriting/commitment fee 695
This was paid and was supposed to be refunded
If the goof faith estimate had
Underwriting fee 695
Commitment fee 695
Then it would make sense that the commitment fee is used to pay for the underwriting fee.
But there is only a single 695 fee, not two 695 fees, which seems a little sneaky.
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Response by front_porch
almost 15 years ago
Posts: 5316
Member since: Mar 2008
I don't know Approved Funding -- have never dealt with them -- but your real estate agent should have told you that if, as of December 31, the Edge didn't have their fidelity bond in place, it would delay any commitment letter, regardless of the lender.
I'm more shocked that a building could be in an "approved lender" situation without having handed over that paperwork in the beginning.
ali r.
DG Neary Realty
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Response by Equity8
almost 15 years ago
Posts: 5
Member since: Jan 2011
Was the project Approved with Fannie Mae November 29? I don't believe it was. The Edge received updated pers approval status not to long after 12/5 to be exact. With out building approval how could the lender proceed with the loan or extend the rate for that matter?
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Response by ctent
almost 15 years ago
Posts: 26
Member since: Dec 2010
Could the contract be voided on Dec 31 after the commitment letter expired. What if the lender came back with 5.5% instead of 4.75%. What's to protect from being gouged by the rate being given?
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Response by juuceman
almost 15 years ago
Posts: 84
Member since: Sep 2010
ctent - depends on the financing contingency contained within the contract. If the preferred lender is identified within the contract and there is a date certain to obtain funding, the buyer could likely have walked away if they did nothing that caused the lack of financing. If on the other hand, the buyer didn't have a good financing contingency in the contract, he could be stuck having to purchase regardless of interest rate and hoping that the sponsor would extend the closing date to allow for the obtaining of a mortgage.
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Response by Wbottom
almost 15 years ago
Posts: 2142
Member since: May 2010
where was your lawyer for all of this??
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Response by streetsmart
almost 15 years ago
Posts: 883
Member since: Apr 2009
Ctent, I guess if they came back with 55%, the buyer would have to go to another mortgage company.
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Response by crazybuyer
almost 15 years ago
Posts: 13
Member since: Sep 2010
The contract had a mortgage contingency clause that required a loan commitment by December 9. Since we got it by December 7, we couldn't get out that way.
Then we were in a strange gray area of having received a loan commitment, but no clear to close, then an expired loan commitment. This situation was not specifically addressed in the contract.
I would think that a loan commitment means you're ready to schedule a closing, but that wasn't the case for us. I'm not sure what the first loan commitment actually meant. We received it, then kept waiting for the loan to be processed until after it expired.
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Response by pier45
almost 15 years ago
Posts: 379
Member since: May 2009
Crazybuyer, regardless of the "should have" input from whoever, big thanks for sharing the experience as it's valuable for us future buyers.
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Response by streetsmart
almost 15 years ago
Posts: 883
Member since: Apr 2009
you can't schedule a closing if the condo project doesn't cooperate. The condo project is your seller; they have to be ready to close. You cite expiration of paperwork on the part of The Edge. Therefore you couldn't close and your rate lock expired. You can get a rate lock extension. All banks offer that. Didn't this mortgage company offer it? If they didn't you have to ask them why. This is very important and you should follow up on this.
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Response by crazybuyer
almost 15 years ago
Posts: 13
Member since: Sep 2010
The condo was ready to close after we received the loan commitment on December 7. We were also ready to close. Only Approved Funding told us to not schedule a closing. We kept waiting for them to give us a clear to close which never happened before their own loan commitment expiration on December 31.
The reason given for us not getting an extension of the original rate was something like paperwork associated with Fannie Mae expired in November after we got our original rate and now we have different paperwork associated with Fannie Mae so we have to go with market rates.
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Response by front_porch
almost 15 years ago
Posts: 5316
Member since: Mar 2008
"should have" is important. Moving towards CTC ("cleared to close") status is your real estate attys job, and your real estate agent's job. Those two people should have been on the phone with Approved Lending every day from December 8th onward.
Once it became clear that there was a fidelity bond issue, then it's those two people's job to beat up the building to make sure the bond gets purchased.
This is an obstacle that comes up ALL the time, and IMHO, your team didn't play it right.
ali r.
DG Neary Realty
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Response by crazybuyer
almost 15 years ago
Posts: 13
Member since: Sep 2010
I received further explanation of the change in rate and want to clarify. At the time of our application, the building was Fannie Mae approved and we were given the initial rate. Then the Fannie Mae approval expired which caused our rate lock to be no longer valid. After some time, the building got approved again and we got our new rate lock at the current market rates at the time. The expiration of the Fannie May approval was the responsibility of the building and not the lender.
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Response by wb1234567
almost 15 years ago
Posts: 15
Member since: Sep 2010
Approved funding and the sales person w/ the initials DC are a fraud. Wasted months of my time, used religious holidays as excuses and nearly made me walk away from my purchase. I cant believe Approved funding is still on the list of recommended lenders at the Edge.
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Response by crazybuyer
almost 15 years ago
Posts: 13
Member since: Sep 2010
Update, loan was sold to BB&T.
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Response by newbuyerEDGE
over 14 years ago
Posts: 1
Member since: May 2011
I just had a horrible experience with Approved Funding and would have quite frankly preferred having a slightly higher interest rate and avoid the problems I experienced. They approved me for a loan amount that exceeded their lending criteria and only realized this more than a month later when it came time to issue my commitment letter. Biggest mistake. Do not use
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I beg to differ with you. The $695 underwriting fee has to be paid and they did not collect that fee at closing.
I don't know what expiration of paperwork means, can you explain. And ask them to explain what happened. They have to be accountable.
The timing of the dragging things out is suspect given what was happening with respect to interest rates. Do you have evidence that they were the source of these delays, and if so, do you know if you have any legal remedies? FYI, the value of the loan you got stuck with is in the range of 5-15% less valuable than the one you thought you were going to get and/or lock in, depending on how you count. If I were you, I would explore my legal options as this is not an insignificant amount of money.
I'm not exactly sure what the edge paperwork was as it was explained in a very unclear way over the phone and not in writing. Something about FHFA or Fannie May.
Regarding the $695, on the good faith estimate, there is only a single item
Underwriting/commitment fee 695
This was paid and was supposed to be refunded
If the goof faith estimate had
Underwriting fee 695
Commitment fee 695
Then it would make sense that the commitment fee is used to pay for the underwriting fee.
But there is only a single 695 fee, not two 695 fees, which seems a little sneaky.
I don't know Approved Funding -- have never dealt with them -- but your real estate agent should have told you that if, as of December 31, the Edge didn't have their fidelity bond in place, it would delay any commitment letter, regardless of the lender.
I'm more shocked that a building could be in an "approved lender" situation without having handed over that paperwork in the beginning.
ali r.
DG Neary Realty
Was the project Approved with Fannie Mae November 29? I don't believe it was. The Edge received updated pers approval status not to long after 12/5 to be exact. With out building approval how could the lender proceed with the loan or extend the rate for that matter?
Could the contract be voided on Dec 31 after the commitment letter expired. What if the lender came back with 5.5% instead of 4.75%. What's to protect from being gouged by the rate being given?
ctent - depends on the financing contingency contained within the contract. If the preferred lender is identified within the contract and there is a date certain to obtain funding, the buyer could likely have walked away if they did nothing that caused the lack of financing. If on the other hand, the buyer didn't have a good financing contingency in the contract, he could be stuck having to purchase regardless of interest rate and hoping that the sponsor would extend the closing date to allow for the obtaining of a mortgage.
where was your lawyer for all of this??
Ctent, I guess if they came back with 55%, the buyer would have to go to another mortgage company.
The contract had a mortgage contingency clause that required a loan commitment by December 9. Since we got it by December 7, we couldn't get out that way.
Then we were in a strange gray area of having received a loan commitment, but no clear to close, then an expired loan commitment. This situation was not specifically addressed in the contract.
I would think that a loan commitment means you're ready to schedule a closing, but that wasn't the case for us. I'm not sure what the first loan commitment actually meant. We received it, then kept waiting for the loan to be processed until after it expired.
Crazybuyer, regardless of the "should have" input from whoever, big thanks for sharing the experience as it's valuable for us future buyers.
you can't schedule a closing if the condo project doesn't cooperate. The condo project is your seller; they have to be ready to close. You cite expiration of paperwork on the part of The Edge. Therefore you couldn't close and your rate lock expired. You can get a rate lock extension. All banks offer that. Didn't this mortgage company offer it? If they didn't you have to ask them why. This is very important and you should follow up on this.
The condo was ready to close after we received the loan commitment on December 7. We were also ready to close. Only Approved Funding told us to not schedule a closing. We kept waiting for them to give us a clear to close which never happened before their own loan commitment expiration on December 31.
The reason given for us not getting an extension of the original rate was something like paperwork associated with Fannie Mae expired in November after we got our original rate and now we have different paperwork associated with Fannie Mae so we have to go with market rates.
"should have" is important. Moving towards CTC ("cleared to close") status is your real estate attys job, and your real estate agent's job. Those two people should have been on the phone with Approved Lending every day from December 8th onward.
Once it became clear that there was a fidelity bond issue, then it's those two people's job to beat up the building to make sure the bond gets purchased.
This is an obstacle that comes up ALL the time, and IMHO, your team didn't play it right.
ali r.
DG Neary Realty
I received further explanation of the change in rate and want to clarify. At the time of our application, the building was Fannie Mae approved and we were given the initial rate. Then the Fannie Mae approval expired which caused our rate lock to be no longer valid. After some time, the building got approved again and we got our new rate lock at the current market rates at the time. The expiration of the Fannie May approval was the responsibility of the building and not the lender.
Approved funding and the sales person w/ the initials DC are a fraud. Wasted months of my time, used religious holidays as excuses and nearly made me walk away from my purchase. I cant believe Approved funding is still on the list of recommended lenders at the Edge.
Update, loan was sold to BB&T.
I just had a horrible experience with Approved Funding and would have quite frankly preferred having a slightly higher interest rate and avoid the problems I experienced. They approved me for a loan amount that exceeded their lending criteria and only realized this more than a month later when it came time to issue my commitment letter. Biggest mistake. Do not use