I know lenders are tightening up nowadays and rightfully so. There have been an abundance of foreclosures, partly as a result of their previous “loose” lending practices. However as they tighten up there tend to be problems. I personally ran into 2 situations within the last week where Lenders have seemingly made it impossible for people to take possession of their new homes.
Here is what is happening: The lawyer representing the buyer has been instructed by the buyer’s lender that they are not to release the mortgage funds until a “Possession Certificate” has been given to the buyer from the builder. Essentially what they are saying is that they will not pay for the house until possession has been granted on paper to the buyer.
Here is where the problem lies: The builder will not grant the “Possession Certificate” until the keys are releasable and that does not happen until the home has been paid for in full. This is so ridiculous that it turns out that the conversation goes like this: “You do it.” “No. You do it” “No, you do it first” “No I will do it as soon as you do it, I promise…..” What a GONG SHOW.
I would like to know who has run into this and I also want to know if there is a lawyer out there who might consider sorting this ridiculous issue out without freaking out their buyer clients. What ever happened to sorting this stuff out behind the scenes so that the buyer sees nothing but a smooth transaction? What is the point of telling the buyer that there is a “major problem” going on when one way or another it will be sorted out and the buyer will get their keys on schedule. I say call the REALTOR and have them go to the builder and the mortgage broker/lender involved to sort the issue out behind the scenes. What a concept!
The great news is that happy people are moving on a consistent basis!!!!!!!!
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Good Point Tom! I think that is precisely a big part of the reason that builders encourage their buyers to use their lawyer, so it all gets done in one office at the same time. The other reason of course is for competitive reasons — it saves the client an unnecessary expense.
Outside of that, don’t lawyers use “undertakings” so that one lawyer will give a goodwill promise to the other to do one side as soon as the other is completed?
Just my 2 cents……