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Lender won't fund loan after signing loan documents (CA)

This is a pretty long refinance so I will keep it short as possible and thank you for your help.I started a refinance on 9/3/2020. I went through the process pretty fast since I had most of the documents ready. I was sent a closing disclosure on 10/7/2020 and signed. I was supposedly waiting to schedule signing loan documents. On 10/27, I was told that I was considered "self-employed" (More than 25% ownership in a C corporation) and that I have to send them a Profit & Loss statement signed by the CPA. I made sure this was the only document needed from the CPA to close. They assured me it was. I produced this document but a few days later, they told me they wanted another document signed by my CPA. Same story - last document. Then they said the P&L statement expired and they needed another one from my CPA. The manager assured me he will reimburse me the cost post-signing so I gave them the document again. I finally signed the loan documents and now a few days after, they're asking me for ANOTHER P&L statement from my CPA and they won't fund my loan until I do. I told them to reimburse me now for the CPA costs and for the 3rd P&L statement they want. They insist they will send me a revised closing disclosure to offset the CPA costs. They tell me the investor wants it. I have been told "this is the only cpa document we need" four times now.What are some of my options? Is the lender legally obligated to fund my loan since I signed? by johnsong525744 from Los Angeles, California. Jan 7th 2021 Reply

Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 2,423 contributions

I NEVER tell a borrow "This is all we need to close your loan". Underwriting calls the shots. It may appear to me that we have everything we need, but until the underwriter signs off on everything, the loan package is signed, the loan is funded, and the Deeds are recorded, there is always the risk that something else will be required. This is a perfect example of why I won't say it. | You are the 'Victim of newer requirements established by the Agencies (Fannie Mae and Freddie Mac) as a result of the economic impact of COVID. The requirements are that borrowers identified as Self-employed must provide an Audited P & L good through the end of the month just prior to closing. Many lenders will accept a non-audited P & L but require copies of bank statements for the preceding three months to match up revenue claimed on the P & L with actual deposits received. This requirement sometimes creates issues depending on when the loan is anticipated to close and how quickly the CPA can get the Audited P & L to the lender, AND how quickly the lender's underwriter can get to your file to review it. There are many lenders that do not have sufficient underwriters to do this quickly, meaning you will likely have to do this again several times before you are done. | No, the lender is NOT obligated to fund your loan, just because you signed the loan package. Every loan package I have seen includes documentation that requires the borrower to provide any additional documentation requested by the lender and gives the lender the right to not fund if the documentation is not received. | Today is the 7th. Get your CPA to get you the P & L through the 31st of December ASAP. Get it to the lender by Monday the 11th and you should be able to get funded this month, unless they have an inefficient underwriting department. Your options really are only to get them what they need timely to fund your loan or to start over with another lender. Keep in mind that any new lender is going to have the same P & L requirement, BUT, depending on when you locked your loan, rates may be better today, so it may be worth looking at other lenders. I'd be happy to give you an idea of what our pricing would be. Additionally, We have the ability of closing most loans that don't need an appraisal in as little as 14 days. Just give me a call. ~ 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 are pending approval in VA, so give us a call. ~ 480-889-9000.

Jan 7th 2021
Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,703 contributions

It sounds like you have fallen into a common situation, that of working with a low experience application taker type Loan Officer, versus a fully licensed and experienced Loan Officer who can properly guide you through the process. Your loan is never 100% real until fully signed, and closed (funded). You have basically no recourse at this point. The bottom line is get them what they ask for if you want to close, or start all over with someone different. They gave you poor information from the beginning (not understanding you fall into the self employment bucket), and set poor expectation, then made improper statements. I would never tell a client "this is the only document needed" EVER! My read is you pick a bad loan officer. Finally, COVID has changed mortgage guidelines, especially for self employed. P&L's being very current at the time of closing IS a requirement. Good luck. I lend in MN Wi IA SD ND. Find me at - NMLS 274132

Jan 7th 2021
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