From Jacobs’s mailbag:
I am refinancing a residential property with one of the big banks in the area. I have an interest rate lock, which expires soon.
The bank appears to be continually asking for new information, making additional requirements that should have been made up front and also being slow to respond.
I am concerned that they are stalling/intentionally delaying, as interest rates have gone up so much since I received the rate lock. I have asked for an extension of the rate lock and have not received an answer.
Are you hearing of other situations like this, since mortgage interest rates have risen so much in the last six to eight weeks?
The mortgage industry is under immense pressure to comply with all of the new regulations regarding borrower qualifications. There are also many loan programs that your refinance can fall under.
We are seeing enormous amounts of documentation requested. The main problem may be that when the loan officer did the initial intake he may have failed to tell you that additional questions often arise.
Those questions often require additional documents and information.
Each time you respond to a request, the new documents may reveal some other area of inquiry that the underwriter did not originally know about.
This laborious underwriting process has been occurring for many months and does not appear to be part of any conspiracy to wait you out until interest rates rise.
Harvey S. Jacobs is a real estate lawyer in the Rockville office of Joseph, Greenwald & Laake. He is an active real estate investor, developer, landlord, settlement attorney and lender. This column is not legal advice and should not be acted upon without obtaining legal counsel. Jacobs can be reached at (240) 399-7900 or firstname.lastname@example.org.