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Funding rescinded by lender after closing due to lender error

A lot of time and energy went into this process from 06/19/2020 - to date 10/15/2020, it's frustrating that it has come to this. Thanks in advance for your advice and help!---On 10/15/2020 5:39pm I received a call from A Y (Loan Officer) expressing that we have a major problem. According to A upon funding and deed Title realized that Texas has a law does not permit a refinance until after 12 months of cash-out refinance. He mentioned that Texas is the only state that has this law and they didn't realize this until this point. A stated that he was to meet with CEO to figure out how to handle this problem and an unrelated issue with another file which they have. I asked if loan had funded he stated that it had. He said he'd follow up with me after meeting with CEO, I sent A the email below to confirm whether my Amplify loan was paid off and for additional details of the problem so that I could research - I called L L (Loan Processor) 10/15/2020 at 6:24pm to get more details and she stated that they realized that Texas has a "weird law" that doesn't allow for refinance within 12 months of cash out refinance and that they funded but have to request the wire back to cancel funding. She stated A would be following up with me on 10/16/2020 after trying to figure out how they will be handling this issue. I asked about payment to Amplify and she said to go ahead and make the payment to them for October 2020, I advised that there will likely be a late fee on 10/16/2020 when they're open and I'm able to pay my October 1 payment. ----We purchased our home 06/25/2015 5% financed through T P - SN Company, I closed a Cash-out refinance with Amplify 11/20/2019 at 4% from 5%,because of current great low rates I applied for another refinance with referral by F I C U - CF - Loan Officer A who I submitted documents to and advised that I had refinanced with Amplify at the end of 2019/4th Quarter, credit approval 09/01/2020, according to A delay was due to demand and number of files they're working, 09/08/2020 locked in mortgage at 2.75% rate at buy down cost of .375% points ($1,714.), A advised it could take up to 60 days to close due to demand,Closed and signed documents with mobile notary at our home on 10/07/2020 approx 9pm, mandatory 3 day wait period to fund, Saturday 10/10/2020, 10/12/2020 funding delayed due to final credit pull and I was asked by L to manually unlock my Equifax credit report and explain to L 08/22/2020 inquiry of Telco where I was shopping mortgage options and rate signed and sent explanation letter, was told by L not to pay Amplify since funding would occur before Amplify late fee date of 10/16/2020, was told by Lerine loan would fund 10/13/2020 but then she had issues with Equifax system not pulling second half of report, was told not to pay Amplify since funding would occur before Amplify late fee date of 10/16/2020,was told by L congratulations and that funding was processed 10/14/2020, first payment to CMF - Community Mortgage Funding will be due on 12/01/2020, -----On 10/15/2020 5:39pm I received a call from A expressing that we have a major problem. According to A upon funding and deed Title realized that Texas law does not permit a refinance until after 12 months of cash-out refinance. A stated that he was to meet with CEO to figure out how to handle this problem and an issue with another file. I asked if loan had funded he stated that it had. He said he'd follow up with me after meeting with CEO, I sent A the email below to confirm if my Amplify loan was paid off and for details of the problem so that I could research - I called L 10/15/2020 at 6:24pm to get more details and she stated that they realized that Texas has a "weird law" that doesn't allow for refinance within 12 months of cash out refinance and that they funded but have to request the wire back to cancel funding. She stated Allen would be following up with me on 10/16/2020 after trying to figure out how they will be handling this issue. I asked about payment to Amplify and she said to go ahead and make the payment to them for October 2020, I advised that there will likely be a late fee on 10/16/2020 when they're open and I'm able to pay my October 1 payment. What are my options? by charlie246 from , California. Dec 6th 2020 Reply


Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 2,211 contributions

I'm not sure which lender you were using, but yes, Texas does have a couple of quirky rules, but honestly, if they are licensed there, they SHOULD know them. So where are we and what can be done? You are now past the one-year mark and they should be able to fund a loan. BUT...... If you would rather NOT deal with them, reach out to me and I will connect you with one of my peers that is fully licensed AND TRAINED in Texas Mortgage requirements. Rates are a little better now than they were back in October, so we should be able to give you a better loan than the one they messed up. Give me a call and let's see what we can do for you. ~ Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ At NEXA, we've got you covered. We are licensed in all states except MA and NY and we're pending approval in VA. ~ www.ApplyYes.com 480-889-9000.

Dec 6th 2020
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Can they legally terminate our agreement/contract after closing and even rescind funding due to their negligence/error? What happens to those legal binding contracts which neither I or them formally terminated? They've offered to move forward, due to their mistake they'll cover $2K of my closing costs and also pay for my appraisal which should be completed today (delayed to 12/7 due to busy schedules). I'm hoping that we don't run into any additional inconveniences moving forward. This has been a very frustrating ordeal to say the least.

Dec 7th 2020
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Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 2,211 contributions

First of all, I am glad they are doing the honorable thing and stepping up to cover some of your costs. Yes. A lender can cancel a contract after funding for various reasons. The most common cancellation occurs when a lender discovers in the first day or two after funding that the borrower has lied about something (financed a new car in the rescission period, called the home their primary residence and the lender finds out they don't actually live there, etc.) But in this case, allowing the loan to go forward would be violating a Texas statute. I'm pretty sure the courts (if it got that far) would rule on the side of the lender. I also think the court would order the lender to make you whole by reimbursing you for any out of pocket expenses. I know there is language in the agreements you sign that allow a lender to cancel in the event facts are discovered to be incorrect. Although I am only guessing here, there is probably similar language in the documents you signed that allows the cancellation of the loan in the event the loan violates laws or ordinances. I would like to think that they will go out of their way to make this right for you. They can't undo the inconvenience, but they can, and is sounds like they are, trying to compensate for their error. Finally, when this is all done, I would encourage you to file a formal complaint with the Texas Department of Savings and Mortgage Lending. Regulators need to know when a particular lender or loan officer is making these kinds of mistakes. Your complaint could result in the company being ordered to beef up their training, pay fines for their failure to follow the law from the beginning. More importantly, they could be ordered to provide additional compensation to customers like you that were harmed by their negligence or incompetence. ~ Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ At NEXA, we've got you covered. We are licensed in all states except MA and NY and we're pending approval in VA. ~ www.ApplyYes.com 480-889-9000.

Dec 7th 2020
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Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 2,211 contributions

File the complaint here: https://www.sml.texas.gov/ConsumerInformation/tdsml_consumer_complaints.htmlBert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ At NEXA, we've got you covered. We are licensed in all states except MA and NY and we're pending approval in VA. ~ www.ApplyYes.com 480-889-9000.

Dec 7th 2020
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Bert, You're amazing! Thanks so much for taking the time to answer so many of my questions, this helped me clear so much doubt. An Appraisor completed his process yesterday so hoping all will flow smoothly moving forward. I will definitely follow through with all of your recommendations. Thank you so much! Sincerely, Charlie

Dec 8th 2020
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Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 2,211 contributions

I'm always happy to help. If you or anyone else you know could benefit from what we do (make Mortgage Loans), Please send them my way. I'm always happy to help, ~ Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ At NEXA, we've got you covered. We are licensed in all states except MA and NY and we're pending approval in VA. ~ www.ApplyYes.com 480-889-9000.

Dec 8th 2020
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I will definitely send prospects your way. Happy Holidays!!

Dec 9th 2020
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