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Can a lendoer on a home loan request documents after closing ?

My home closed escrow and and was funded. Suddenly 10 days later the lender wants me to send them a statement that shows one of my credit cards is paid off in full. It was discussed during the loan process that this one card be paid at escrow by escrow out of funds. It was not, and there is nothing in writing saying that stated this. Moving is expensive, and quite honestly it is a 1800.00 credit card, not a life changing amount. Do I have to pay this off and prove it, or can I just tell them no. by mandjalverson664 from Big Bear Lake, California. May 25th 2017 Reply


Maureen Martin (MaureenMartin)
#868 ranked lender in California - 8 contributions

You do need to pay it off as it sounds like it was clearly a condition of the loan. It sounds like the loan would not be saleable if that is not paid (likely a debt to income issue) and in which case the loan could be recalled. It's unfortunate that this happened, but it sounds like you knew about it all along, but it was just missed by escrow and the funder. I would just pay it and move one. Mistakes happen, even though it's very unfortunate regarding the timing. :(

May 25th 2017
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Bill Swars (swarsb)
#855 ranked lender in California - 9 contributions

Maureen's reply is spot on but I would suggest you check your closing statement to confirm the credit card balance was not included in the closing figures. It is possible escrow collected the funds at closing, made the payment and the credit card company has not yet posted the payment.

May 25th 2017
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,683 contributions

The lender said it was required to get the loan, and it would have been in writing.. it would have been listed on the conditional loan approval. You say you knew about it but thought it would be paid through escrow?? Did you bring in the extra funds? if not, did you question why they didn't ask for the extra funds? It appears you knew this was required but because they didn't ask, you didn't bring it up.. If you don't pay off the account and provide the proof, the lender could call the note due. One of the documents you signed when you got your loan is called a "Compliance Agreement".. this is a document that states you agree to provide paperwork or any other documentation request that might have been missed in error during the process. This is to aid the lender in selling the loan off after it's closed (most all loans are sold off).. if you don't comply, then the lender could call the note due,and you would have 90 days to pay them off or they would foreclose.. This is unlikely to happen, but the rules say they can if they choose to.. If you don't provide the proof, and the loan is not sell able to Fannie/Freddie etc.. then it would be subject to being sold on the "Scratch and Dent" market.. where the loan could only bring 70% to 80% of it's face value.. The lender is not allowed to pay the $1800 for you, so they are definitely in a tough spot if you don't pay it off and provide the proper documentation. It's possible the lender will let the loan remain in place, but then bring litigation against you for damages.. if you have a $300K loan, then the lender stand to lose as much as $60K to $90K.. all because of an $1800 credit card.. Trust me.. just pay it off, provide the lender with the documentation and move on. I'm a preferred Lender with Arizona and California being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

May 25th 2017
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Larry Gray (lgray_312_247)
#3 ranked lender in California - 1,122 contributions

Glad to hear you closed on your new home, and if at Big Bear Lake...great 2nd home and vacation area! Great primary home area for those inclined to appreciate it!. If escrow missed taking care of it somehow, you can correct it. In fact if this was planned for all along their should be the money in escrow to cover it. Have you contacted them about it? If for some reason the lender forgot to make sure sufficient funds included the amount to pay off the credit card on the CD, or closing statement...it still is on you to make sure it was paid off. All you have to do is pay it off online, allow sufficient time for you to be able to make an online printout that shows 0 balance and 0 monthly payment...but must include at least the last 4 digits of acct. no., logo/name of bank, your name and website address imprinted at the bottom. Send it (secure email) to your loan officer or loan employee requesting it and you are done! They likely handle many loans with a ridiculous amount of detail in this heavy compliance era of lending and this sort of thing can happen. You can help them get it properly completed for sale directly to fannie mae or Freddie mac, or more likely to the larger loan servicer to handle your loan. You likely do not want a typical originator holding your loan and trying to properly service it anyway!

29 days ago
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