How fast can one underwrite a loan?  Well that’s purely a matter of motivation…!  I have one more closing story today.  Actually I have a lot more stories but here’s another new one from this week :)

Monday I had another closing.  This one for my new primary that I’m buying in Goodyear.  I’m psyched about this deal because we’re getting in for zero down (primary residence) and they’re paying 10% realtor commission, so effectively we’re walking away from closing with about $25k.

So I needed about 45 minutes to drive to the closing appointment and as of an hour before the appointment, still no HUD-1.  Just as I’m leaving, YOU’VE GOT MAIL!  It shows up in my inbox.  I print it out, grab my calculator, and hit the road.  Of course I’M concerned with being on time to the appointment, silly me.  They reschedule at will and threaten to take away our realtor commission and the $75k off if we’re late to close.

What’s the first thing everyone looks at on the HUD-1?  The bottom left column of course!  The amount due to/from buyer.  How much do we have to pay or how much are we getting back?  We had already put $5k down for earnest money, the builder was contributing $6,600 toward closing costs, and it was 100% financing.  So I’m expecting to get about $3,500 back.  The bottom line says I’m getting $47 back.  Hmmm.  There’s a problem.  Now I had a little quick detective work with the calculator to see where my missing money had gone to.

I spotted it right away.  I added the amounts of the 1st and 2nd mortgage together and they were not enough to cover the purchase price.  It was something like $3,800 short.  They had rounded the loan amount down a few thousand to a nice even number.  Why?  I was happy to find the error, but then I realized that when the loan amount is wrong, and especially when it’s short, that means we have to go back and ask for more money.  This means they have to re-underwrite the loan, re-draw docs, etc. etc.  Historically this has not been a quick process at all.  Plus it’s the end of the builder’s fiscal year and everyone’s in a frenzy.  They put the burden of closing on time (Sept 30) on our shoulders otherwise we lose all incentives ($75k, $6,500 toward closing, 10% realtor commission).  I called my loan officer from the car and left him a voicemail regarding the error.

We arrived at the closing appointment and a hire-a-signer escorts us to a sterile office.  They had to bring in extra notaries to cover all the closings they had going on.  The first thing he gets out is the HUD-1.  I had thought maybe there was a small chance it had been corrected in the prior 45 minutes, since my copy said “Pre-Audit Subject to Change” across the top.  Not so.  Same error still there.  I told him there was an error and we wouldn’t be closing at this time.  He called in an escrow officer, I explained the situation to her, and that we had one chance to get it right since I would be out of town the rest of the month.  I asked what they would do to preserve all the incentives since I would not be able to sign in September now.  She suggested that I sign the papers as-is and pay $3,685 more out of pocket that I had planned to.  I told her I wasn’t interested in that scenario and I would go upstairs and talk to my loan officer.  It turns out he’s in the same building because the builder owns the lender and title company as well.

By now it’s about an hour and a half after I had left the message for my loan officer.  He hadn’t called me back yet so we went upstairs to the reception desk where he works.  Apparently they’re not used to walk-ins because the receptionist looked at me like I was an alien when I said I didn’t have an appointment.  Maybe 20 minutes later my LO came out and told us he had been making a bunch of calls to resolve the error.  The loan had to go back through underwriting, the docs had to be re-drawn, and he hoped to have it all done any minute.  He hands us a $10 gift card for coffee and tells us to go take a break and someone would tell us when they’re ready to have us close.

It actually turned out good because we had another closing simultaneously at another building and now we had time to quick run over there, have me sign the 1-2 papers I had to sign as spouse, and then get me back in time to close this one.  Two hours later everything was corrected and we got the closing done.

My brother-in-law had just arrived in from Dallas, so he, my husband, and I went out for a celebratory dinner after all the hoopla.  My brother-in-law’s closing was the one I wrote about the other day regarding the screw-up with the countertops.  My husband’s closing had it’s own set of issues that I chose to stay out of completely, and my closing was just finished as well.  We toasted to each other’s new investments and then headed out to Tucson to paint my brother-in-law’s new house with him.