Consumer off ice studies closings
WASHINGTON — The federal government has a real estate question for consumers who’ve bought or refinanced homes that’s certain to generate more than an earful: Were there any problems when you went to close the deal?
Any last-minute glitches or surprises that delayed the settlement, required unexpected negotiations or, worst of all, blew up the sale or refi?
Did you get your settlement sheet in advance so that you could review the documents intelligently? Were there any errors or discrepancies that popped up — charges that were considerably higher than you had expected, loan-related fees or an interest rate that differed from what you thought you had signed up for? Was the whole process pleasant? Was it “empowering”?
Wow. Talk about stirring up hornets. The Consumer Financial Protection Bureau, which has broad regulatory powers in the real estate settlement arena, wants to know whether there are common problems that need to be fixed. If so, it may make what it euphemistically calls “interventions” in order to right what seems to be wrong.
The bureau also wants to hear from realty professionals, lenders, title insurance and escrow agents, attorneys and others who play roles in closings on homes — the people who produce, bless and witness the signings of mounds and pounds of paper associated with the settling of America’s home transactions.
If you want to share your experiences with the Consumer Financial Protection Bureau, email your account by Feb. 7. Detailed instructions for submitting comments — and postings of comments made to date — are online. Go to http://tinyurl. com/CommentsOnClosings.
From industry accounts, the vast majority of closings are successful. The National Association of Realtors estimates that roughly 10 percent to 12 percent of all pending sales don’t close for various reasons. But conversations with agents suggest that a much higher percentage of settlements experience problems that arise just before or during the event that either delay or complicate the process.
Though eleventh-hour delays can occur because of title insurance-related issues and various others, a disproportionate percentage appear to be related to the mortgage.
Late in the game, the lender might inform the borrower: Sorry, but we’ve encountered some underwriting red flags in your application that you’ll need to resolve before we can proceed. Or oops, we didn’t get all the loan documents to the closing agent in time. Or worst of all, we’ve changed our mind. We simply cannot do this loan and we sincerely regret that we’re telling you this on the day before your scheduled closing.
Gary Kassan, an agent with Pinnacle Estate Properties Inc. in Valencia, Calif., said he routinely gets buyers preapproved by lenders but that in at least 20 percent of purchases, problems pop up after the preapproval that threaten to delay or disrupt closings. In early January, Kassan was waiting for a lender to agree to close on a deal that was originally scheduled for late December. The problem: underwriters’ questions that arose late in the process about the borrower’s income.
“I want to ask all these loan officers why didn’t you bring this up earlier, before you gave my client a preapproval letter?” he said.
Cindy Westfall, an agent with Premiere Property Group in the Portland, Ore., area, has had two recent sales knocked off track by underwriting issues just before the closing, one of which caused the entire sale to blow up, forcing her buyers to start their home search all over again. “My clients were very stressed” by the entire experience, she said in an interview.
Rhonda Masotta, an agent with Bright Realty in Sarasota, Fla., almost found herself in the same situation: Last year, she was sitting at a table for her buyer’s closing on a $1.25 million home. The only thing missing was an essential — confirmation that the bank committed to do the loan had wired the money needed to complete the transaction.
“We all waited for hours,” but there was no word from the bank, Masotta said. The closing was rescheduled for the following day, but then came the bad news: The bank had decided to back out of the deal. That’s usually a death sentence on a home sale, but Masotta and her colleagues on both sides of the transaction opted for an emergency rescue attempt and found a bank willing to underwrite and fund the loan on an expedited basis later the same day.
That’s not the way closings are supposed to work, but stuff happens. home park, $28,000.
Southwest Builders Inc., 8213 Rambling Road, residence, remodel, $22,000.
Craig A. Lane, 15008 Elm Creek Road, accessory, erect, $20,000.
Champs Construction, 204 NW 34, accessory, erect, $20,000.
Jahco Oklahoma Properties LLC, 13801 N Pennsylvania Ave., business, remodel, $20,000.
Mass Architecture, 1624 S Agnew Ave., assembly hall, remodel, $15,000.
Wynn Construction Co. Inc., 700 Colcord Drive, temporary building, move-on, $10,000.
Carl Mears Corp., 1507 Spring Drive, storm shelter, erect, $6,500.
Robert Pirlot, 11932 SW 7, storm shelter, installstorm shelter, $5,700.
Gudelia Salas, 3153 SW 39, residence, add-on, $5,000.
Joseph and Katie Okerlund, 15808 Wild Creek Drive, residence, remodel, $5,000.
Demolitions
FY Homes & Shelters, 14704 S Robinson Ave., residence.
Midwest Wrecking, 700 Virginia Drive, house.
Midwest Wrecking, 702 Virginia Drive, singlefamily residence.
The Listing of the Week is a Dallas-style home in Yukon.
The 2,025-square-foot home is at 9032 NW 81 in the Cottonwood Farm addition northwest of County Line Road and Wilshire Boulevard. It has four bedrooms, two baths, two living rooms, one dining area and an attached three-car garage. The living room has a fireplace. The kitchen has eating space, a breakfast bar, pantry and granite counters. The study has French doors. The master bedroom has a walk-in closet and bath with whirlpool tub and shower. The home has a covered porch, covered patio and security system.
The home, built in 2006, is listed for $189,900 with Rod Brooks of REMAX/Preferred Properties. The home will be open from 2 to 4 p.m. Sunday. From County Line Road and Wilshire Boulevard, go west to Prairie Twyne Drive, north to NW 81, then east to the house. For more information, call 751-4330 or 751-4848.