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Loan not Funded after 3 day rescission period passed.

Closed on loan refinance on 9/23/2017 in the State of GA . On 9/28 received call that loan would not be funded because package didn't have second mortgage subordination agreement but Bank was in the process of securing. Received call on 10/3 advising 2nd would not agree to terms and therefore they would not be funding. Do I have any recourse? by wandahed781 from Riverdale, Georgia. 20 days ago Reply


Kenneth Kopper (KenKopper)
#1 ranked lender in Maryland - 519 contributions

Unfortunately No. Your lender should have not closed without the approved subordination agreement in hand unless you are in a auto subordination state and you were meeting the requirements for auto subordination.Please feel free to call to discuss in greater detail.

20 days ago
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,933 contributions

The file technically did not close.. Closing takes place when the 3 day rescission period has ended, the loan is funded and the deed's are recorded.. not when you sign paperwork.. And yes.. so long as the loan has not funded, they can stop it anytime.. You cannot move forward unless the 2nd agrees to subordinate because if the lender allowed the loan to go through, then they would be in 2nd position and your current 2nd, would then take 1st position.. My suggestion is to contact the 2nd mortgage lender and inquire as to why they will not re subordinate.. It could be a simple fix.. I'm a preferred Lender with California and Arizona 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

18 days ago
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,524 contributions

I don't think so. On a refinance, the transaction isn't "real" until three business days have passed AFTER signing the paperwork. As three business days didn't pass, you technically never closed the loan. Two elements from there. Sound like the lender really blew it... You NEVER should ever even got to a signing without a subordination int he file. That is lending 101, first day in class sort of stuff. But more importantly, why is the other lender refusing to subordinate? I've had many of those, and in plenty of cases, we were able to get the lender to subordinate with a call to them. Good Luck.

18 days ago
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