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is mortgage broker liable for missing closing deadline?
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Matt Carter
Feb 16, 2013, 8:27:29 AM2/16/13
to
When preparing to purchase a home recently, I found a mortgage
broker (called Absolute Mortgage) that offered very good terms.
I told Absolute Mortgage in my application that I needed to close
by July 16th (which was a month away). Absolute Mortgage assured
me that they could make that date. I provided Absolute Mortgage
with all documents they requested within a day of each of their
requests. At three weeks until closing, I asked them again,
"Will you be able to close by July 16th?" They assured me that
they could. Same thing at two weeks before closing. Two days
before the closing deadline, I called to make sure they were on
track to close on time. The replied, "No, we are not ready. You
will have to delay closing by two weeks." I told them that this
was unacceptable because it would cause me to breach my home
purchase contract (the seller also had a hard deadline) and
because I already have a contract for someone to move into my old
house on July 20th. Absolute Mortgage insisted, "Sorry. Due to
a large volume of loans we've been processing recently and extra
paperwork we had to process to verify that your new house will be
your primary residence, we won't be able to close till August."
I then found another mortgage lender who was able to close in
only a few days. That lender charged me $2,200 more than
Absolute Mortgage was charging for the same rate. I went to
closing successfully with the new lender.
Is Absolute Mortgage liable to me for $2,200 for not meeting the
closing deadline as they had promised?
In case it matters, this was in Virginia.
broker (called Absolute Mortgage) that offered very good terms.
I told Absolute Mortgage in my application that I needed to close
by July 16th (which was a month away). Absolute Mortgage assured
me that they could make that date. I provided Absolute Mortgage
with all documents they requested within a day of each of their
requests. At three weeks until closing, I asked them again,
"Will you be able to close by July 16th?" They assured me that
they could. Same thing at two weeks before closing. Two days
before the closing deadline, I called to make sure they were on
track to close on time. The replied, "No, we are not ready. You
will have to delay closing by two weeks." I told them that this
was unacceptable because it would cause me to breach my home
purchase contract (the seller also had a hard deadline) and
because I already have a contract for someone to move into my old
house on July 20th. Absolute Mortgage insisted, "Sorry. Due to
a large volume of loans we've been processing recently and extra
paperwork we had to process to verify that your new house will be
your primary residence, we won't be able to close till August."
I then found another mortgage lender who was able to close in
only a few days. That lender charged me $2,200 more than
Absolute Mortgage was charging for the same rate. I went to
closing successfully with the new lender.
Is Absolute Mortgage liable to me for $2,200 for not meeting the
closing deadline as they had promised?
In case it matters, this was in Virginia.
David L. Martel
Feb 17, 2013, 8:59:47 AM2/17/13
to
Congratulations on your new home. Sorry but from what I've read it sounds
as if you withdrew from your contract with Absolute. They did not fail to
close on the agreed date. You anticipated their failure and breached the
contract.
Good luck,
Dave M.
as if you withdrew from your contract with Absolute. They did not fail to
close on the agreed date. You anticipated their failure and breached the
contract.
Good luck,
Dave M.
Stuart A. Bronstein
Feb 17, 2013, 9:00:57 AM2/17/13
to
Matt Carter <r_q_eins...@yahoo.com> wrote:
> When preparing to purchase a home recently, I found a mortgage
> broker (called Absolute Mortgage) that offered very good terms.
> I told Absolute Mortgage in my application that I needed to close
> by July 16th (which was a month away). Absolute Mortgage assured
> me that they could make that date.
[snip]
> When preparing to purchase a home recently, I found a mortgage
> broker (called Absolute Mortgage) that offered very good terms.
> I told Absolute Mortgage in my application that I needed to close
> by July 16th (which was a month away). Absolute Mortgage assured
> me that they could make that date.
> Two days
> before the closing deadline, I called to make sure they were on
> track to close on time. The replied, "No, we are not ready. You
>
> I then found another mortgage lender who was able to close in
> only a few days. That lender charged me $2,200 more than
> Absolute Mortgage was charging for the same rate.
>
> I then found another mortgage lender who was able to close in
> only a few days. That lender charged me $2,200 more than
> Absolute Mortgage was charging for the same rate.
>
> Is Absolute Mortgage liable to me for $2,200 for not meeting the
> closing deadline as they had promised?
I think you have a reasonable claim for damages. If you can prove
> closing deadline as they had promised?
that part of your contract was that they would fund the loan by a
specific date and they didn't, they can be held liable for the
additional money you had to pay to get what they promised you.
There may be other facts here that I am unaware of now that could
change my opinion. But based on what you said, I think you have a
reasonable case.
--
Stu
http://DownToEarthLawyer.com
Don
Feb 19, 2013, 5:10:09 PM2/19/13
to
Matt Carter wrote:
> I then found another mortgage lender who was able to close in
> only a few days. That lender charged me $2,200 more than
> Absolute Mortgage was charging for the same rate. I went to
> closing successfully with the new lender.
One further item of information may be relevant: Did Absolute
> I then found another mortgage lender who was able to close in
> only a few days. That lender charged me $2,200 more than
> Absolute Mortgage was charging for the same rate. I went to
> closing successfully with the new lender.
Mortgage say they would have to charge yo more than originally
agreed in order to do it on time? Was the new lender in any
way related to Absolute Mortgage or suggested to you by Absolute
Mortgage? I understand that a scam often used by mortgage lenders
is to let everything go until the last minute and then increase
the fee when it is too late for the borrower to go elsewhere. I
do not know about the legalities, but if anything like this is
involved, I hope you are able to bring them to justice!
Barry Gold
Feb 19, 2013, 5:12:11 PM2/19/13
to
Absolute Mortgage committed "anticipatory breach of contract" when they
told Matt Carter that they were not ready and he would have to delay
closing.
From the Wikipedia article on "Anticipatory repudiation":
"Anticipatory repudiation, also called an anticipatory breach, is a term
in the law of contracts that describes a declaration by the promising
party to a contract, that he or she does not intend to live up to his or
her obligations under the contract."
It seems to me that Absolute's statement that "we will not be ready on
your scheduled closing date" exactly matches that definition.
To continue from the article: "When such an event occurs, the performing
party to the contract is excused from having to fulfill his or her
obligations."
So Carter is entitled to consider that Absolute has breached the
contract, and he is no longer under any obligation to perform _his_ part
of the contract (namely, borrowing the money).
And I would say that Carter is entitled to his provable damages. In
fact, I would say he has met all the obligations required for a Breach
of Contract action: He was in compliance with the contract right up to
the time that Absolute stated they would "not be able" to meet the
contract, *and* he did his best to mitigate the damages by finding the
best alternate funding source he could. Had he instead failed to close
on his home purchase contract, the seller could have sued for breach and
the damages would most likely have been much higher than the extra
$2,200 that Carter paid for his alternate funding source.
I'm not a lawyer, but if it were me, I'd sue Absolute in Small Claims
Court. I'd bring in the written contract, a log of all my contacts with
Absolute -- where they repeatedly assured him that they would meet their
obligations, then suddenly said they would not at nearly the last minute
-- and the documentation of how much extra he paid (a copy of the
executed loan contract should do, along with the original contract that
he had with Absolute).
Stuart A. Bronstein
Feb 19, 2013, 5:12:40 PM2/19/13
to
able to perform pursuant to the contract, that's called anticipatory
repudiation. When that happens the other party has the right, even
obligation, to cover, and to get compensated for any damages caused
as a result.
___
Stu
http://DownToEarthLawyer.com
Matt Carter
Feb 20, 2013, 11:58:07 PM2/20/13
to
Don wrote:
> Did Absolute
> Mortgage say they would have to charge you more than originally
have just been sloppy and booked too many clients to be able to
meet their deadlines.
The cynic in me thinks that they probably knew early on that
they weren't going to be able to make the deadline, but they
waited till the last minute to tell me on the belief that it
would be too hard at that point for me to take my business
elsewhere.
Thanks, Don, and all the other folks who replied.
> Did Absolute
> Mortgage say they would have to charge you more than originally
> agreed in order to do it on time? Was the new lender in any
> way related to Absolute Mortgage or suggested to you by Absolute
> Mortgage?
No, there were no shenanigans like that. Absolute Mortgage may
> way related to Absolute Mortgage or suggested to you by Absolute
> Mortgage?
have just been sloppy and booked too many clients to be able to
meet their deadlines.
The cynic in me thinks that they probably knew early on that
they weren't going to be able to make the deadline, but they
waited till the last minute to tell me on the belief that it
would be too hard at that point for me to take my business
elsewhere.
Thanks, Don, and all the other folks who replied.
micky
Feb 26, 2013, 2:17:56 PM2/26/13
to
On 20 Feb 2013 23:58:07 -0500, Matt Carter
<r_q_eins...@yahoo.com> wrote:
................
>No, there were no shenanigans like that. Absolute Mortgage may
>have just been sloppy and booked too many clients to be able to
>meet their deadlines.
When I bought my house, the mortgage lender wanted me to start work
BEFORE I moved from NY to MD. He wanted me to stay in a motel, and
run back and forth to NY to pack and move. I wanted to take a month
off, pack, move, and then start work. I arranged a letter from my
new boss saying I was starting earlier t han I was, gave it to the
mortgage guy, and I thought things were settled, but the mortgage guy
also then sent my new boss an affidavit to sign. Though he would lie
for me, he wouldn't lie on an affidavit for me (and I don't blame
him.) AIUI, both the letter and the affidavit were meant to prove
that I wasn't just conjuring up the notion that I had a new job, and I
did indeed have one.
I learned I wouldn't be getting a mortgage about 4 days before the
scheduled closing. When I knew I could borrow the money from my
brother, I should have tried playing hardball with the mortgage guy's
boss (Mortgage now or forget it), but i didn't think of it. It would
have been good experience for me, win or lose.
So at the last minute I borrowed cash from my brother to buy the
$62,000 house. By this time interest rates had dropped so
immediately after I bought the house, I applied at another bank for a
mortgage. They said 30 days.
When 32 days came with no word, I called the bank as if I were a new
customer and asked how long it took to get a mortgage. They said 30
days. I said, Then how come I don't have one? They called me back
the next day and said my paperwork was moving to the next guy's desk
-- whooopee -- but it still took another 45 days to get the mortgage
and pay my brother back.
My brother had so much cash because he was hoping to buy a medical
practice in the San Francisco. Fortunately for me, he didn't find one
during those 75 days.
The second bank was screwed up in many other ways too. At one point
years later they put my brother's name on my mortgage, even though all
he had done was as I said, pay for the house first. . That prevented
my brother from getting a mortgage of his own, when his lender thought
he had too many mortgages. I called the bank here to take care of
that, but then I immediately called my brother's bank in Texas and
told them what had happened, and they seemed to take my word for it.
They didn't ask for a letter from my bank, and I can't believe the
bank had called already, since I figure they were going to send a
letter and not call at all.
The other interesting thing is that they told me not to bring a
personal check to the closing, but all my brother would send was a
Dreyfus Fund check, signed by my brother, IOW a personal check . The
words Dreyfus Fund must have impressed them because no one said a word
about it. (This was 1983)
Also, because I paid cash at the first closing, no one was there to
insist I get fire insurance. And at the second closing, with the
2nd bank, either they assumed I had gotten insurance earlier (which I
had, but how would they know that?) or it was an even greater example
of their incompetence -- that they didn't care -- because they never
asked about it.
me anything. That when the paperwork reached the final desk, the guy
at that desk would call me or the first guy to let me know I had a
mortgage, but until then, no one was giving it a thought, including no
thoughts about what else I would do. This was Pr..... Bank of
Baltimore which was bought out by M&T bank 4 years ago 30% of
employees lost their jobs, all of them those who didn't deal with
customers. Acc to wikip.
<r_q_eins...@yahoo.com> wrote:
................
>No, there were no shenanigans like that. Absolute Mortgage may
>have just been sloppy and booked too many clients to be able to
>meet their deadlines.
BEFORE I moved from NY to MD. He wanted me to stay in a motel, and
run back and forth to NY to pack and move. I wanted to take a month
off, pack, move, and then start work. I arranged a letter from my
new boss saying I was starting earlier t han I was, gave it to the
mortgage guy, and I thought things were settled, but the mortgage guy
also then sent my new boss an affidavit to sign. Though he would lie
for me, he wouldn't lie on an affidavit for me (and I don't blame
him.) AIUI, both the letter and the affidavit were meant to prove
that I wasn't just conjuring up the notion that I had a new job, and I
did indeed have one.
I learned I wouldn't be getting a mortgage about 4 days before the
scheduled closing. When I knew I could borrow the money from my
brother, I should have tried playing hardball with the mortgage guy's
boss (Mortgage now or forget it), but i didn't think of it. It would
have been good experience for me, win or lose.
So at the last minute I borrowed cash from my brother to buy the
$62,000 house. By this time interest rates had dropped so
immediately after I bought the house, I applied at another bank for a
mortgage. They said 30 days.
When 32 days came with no word, I called the bank as if I were a new
customer and asked how long it took to get a mortgage. They said 30
days. I said, Then how come I don't have one? They called me back
the next day and said my paperwork was moving to the next guy's desk
-- whooopee -- but it still took another 45 days to get the mortgage
and pay my brother back.
My brother had so much cash because he was hoping to buy a medical
practice in the San Francisco. Fortunately for me, he didn't find one
during those 75 days.
The second bank was screwed up in many other ways too. At one point
years later they put my brother's name on my mortgage, even though all
he had done was as I said, pay for the house first. . That prevented
my brother from getting a mortgage of his own, when his lender thought
he had too many mortgages. I called the bank here to take care of
that, but then I immediately called my brother's bank in Texas and
told them what had happened, and they seemed to take my word for it.
They didn't ask for a letter from my bank, and I can't believe the
bank had called already, since I figure they were going to send a
letter and not call at all.
The other interesting thing is that they told me not to bring a
personal check to the closing, but all my brother would send was a
Dreyfus Fund check, signed by my brother, IOW a personal check . The
words Dreyfus Fund must have impressed them because no one said a word
about it. (This was 1983)
Also, because I paid cash at the first closing, no one was there to
insist I get fire insurance. And at the second closing, with the
2nd bank, either they assumed I had gotten insurance earlier (which I
had, but how would they know that?) or it was an even greater example
of their incompetence -- that they didn't care -- because they never
asked about it.
>
>The cynic in me thinks that they probably knew early on that
>they weren't going to be able to make the deadline, but they
>waited till the last minute to tell me on the belief that it
>would be too hard at that point for me to take my business
>elsewhere.
Maybe. OTOH I had the impression that no one was in charge of telling
>The cynic in me thinks that they probably knew early on that
>they weren't going to be able to make the deadline, but they
>waited till the last minute to tell me on the belief that it
>would be too hard at that point for me to take my business
>elsewhere.
me anything. That when the paperwork reached the final desk, the guy
at that desk would call me or the first guy to let me know I had a
mortgage, but until then, no one was giving it a thought, including no
thoughts about what else I would do. This was Pr..... Bank of
Baltimore which was bought out by M&T bank 4 years ago 30% of
employees lost their jobs, all of them those who didn't deal with
customers. Acc to wikip.
Matt Carter
Jun 25, 2013, 10:12:14 PM6/25/13
to
Stuart A. Bronstein wrote:
> I think you have a reasonable claim for damages. If you can prove
> that part of your contract was that they would fund the loan by a
> specific date and they didn't, they can be held liable for the
> additional money you had to pay to get what they promised you.
Thanks for the tip.
> I think you have a reasonable claim for damages. If you can prove
> that part of your contract was that they would fund the loan by a
> specific date and they didn't, they can be held liable for the
> additional money you had to pay to get what they promised you.
I just sued Absolute Mortgage in Small Claims Court in Fairfax County, VA and won.
The compliance manager of Absolute Mortgage drove down from Pennsylvania and appeared in court to argue the case for the defendant. The defense consisted of these points:
1) Mr. Carter never paid us any fee, so we couldn't possibly owe him anything.
2) Mr. Carter withdrew his mortgage application. We did not deny him a loan. We could have closed for him if he had not withdrawn his application.
3) The delays were not our fault. We were delayed because the lender we used insisted on stringent checks against occupancy fraud.
The judge explained his ruling as follows:
- The fact that Mr. Carter didn't pay Absolute Mortgage any fee in advance is irrelevant. There was a contract between the parties that required performance by a certain date. Absolute failed to perform per that contract, so Mr. Carter was entitled to recover his costs for using the other lender.
- Of course Mr. Carter withdrew his application. He had to because you (Absolute Mortgage) told him that you wouldn't make the deadline.
The only disappointment was that the judgment was for less than it should have been. Absolute had promised me $0 lender's fees and a closing credit of $1074 (due to negative mortgage points). My new lender, who provided a mortgage with identical terms to Absolute's (but no negative points), required fees of $1140. So, the amount I sued for was $2214. However, the judge only awarded $1140. He said, as he announced his decision, that he wouldn't include the negative points in his award. It doesn't make sense, but I won't complain.
My case number was GV13008133-00.
Stuart Bronstein
Jun 26, 2013, 1:10:48 PM6/26/13
to
Matt Carter <r_q_eins...@yahoo.com> wrote:
> Stuart A. Bronstein wrote:
>> I think you have a reasonable claim for damages. If you can
>> prove that part of your contract was that they would fund the
>> loan by a specific date and they didn't, they can be held
>> liable for the additional money you had to pay to get what
>> they promised you.
>
> Thanks for the tip.
>
> I just sued Absolute Mortgage in Small Claims Court in Fairfax
> County, VA and won.
Congratulations! That's great news.
> Stuart A. Bronstein wrote:
>> I think you have a reasonable claim for damages. If you can
>> prove that part of your contract was that they would fund the
>> loan by a specific date and they didn't, they can be held
>> liable for the additional money you had to pay to get what
>> they promised you.
>
> Thanks for the tip.
>
> I just sued Absolute Mortgage in Small Claims Court in Fairfax
> County, VA and won.
> - Of course Mr. Carter withdrew his application. He had to
> because you (Absolute Mortgage) told him that you wouldn't
> make the deadline.
is grounds for rescinding a contract and suing for damages.
> The only disappointment was that the judgment was for less than
> it should have been. Absolute had promised me $0 lender's fees
> and a closing credit of $1074 (due to negative mortgage points).
> My new lender, who provided a mortgage with identical terms to
> Absolute's (but no negative points), required fees of $1140.
> So, the amount I sued for was $2214. However, the judge only
> awarded $1140. He said, as he announced his decision, that he
> wouldn't include the negative points in his award. It doesn't
> make sense, but I won't complain.
did have more than half of your damages covered, so that is a
victory.
--
Stu
http://DownToEarthLawyer.com
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