I was at a pretty stressful signing yesterday. I’m in a deal where the buyers are taking out a pretty large pair of loans (totaling over $1 million). Last week when the mortgage industry kind of melted down, I called up the buyer’s lender to tell him to please proceed with all due haste, that we should get the deal closed ASAP. Everything was fine, he assured me – the buyer’s loans were totally OK, nothing to be worried about, we could close on schedule.
Well, it turns out, the loan broker was a bit optimistic – he had the buyers using National City Mortgage to do the second loan. It turns out that National City Mortgage is basically on the verge of collapse. Supposedly, National City would be funding loans where the loan documents are already written up – and in this case, the loan docs had been written up this past Tuesday. In theory, we were safe – except that the loan had to fund, no question, by this coming Monday. If not, the loan papers would have to be redrawn. The problem is, National City isn’t funding loans for newly drawn loan papers. Basically, we were told, the buyers needed to sign yesterday or there would be no second loan for them, and hence, no deal.
It kind of reminded me of the Savlador Dali painting about the melting clocks, for some reason:
It was a very stressful situation in the signing room. The buyers arrived a bit late for their 2 PM appointment. They were still signing loan documents past 4 PM (typically, a signing, even for two loans, takes about an hour – these buyers, though, exercised their right to actually read the loan papers!). There were questions about the loan documents, and some calls were made to the loan broker just after 4 PM. “YOU’RE STILL AT THE ESCROW COMPANY SIGNING PAPERS? THOSE DOCS HAVE TO BE AT FEDEX TODAY!” – I could hear the loan broker clearly through the tiny speaker of the cell phone, from all the way across the table.
The escrow officer was aware of that, but what can you do? You move along as quickly as possible, but you can’t afford to rush. If even one document fails to get signed, or an initial is missing, it could mean the loan doesn’t get funded. The FedEx delivery man came and went while we were still signing – he had his schedule to keep, after all. The escrow company would have to hand-deliver the loan package to the local FedEx office by 6 PM. Talk about down to the wire.
Did the loan docs make it to FedEx on time? I sure hope so! Will the loan fund, even if they did? I hope so, too! I trust the escrow officer and her company to get the docs to FedEx on time – I’ve done a lot of business with them, and they are very professional, competent people. I’m a bit more worried about National City Mortgage coming through with the money. The loan is supposed to fund on Monday – we’ll see what happens! As for me, I’m off to L.A. for the weekend with some friends. I’ll put this out of my mind, and trust that it will all work out come Monday. And if not, that’s OK, too. There may be other lenders out there, the buyers might be able to get a loan from a friend, who knows? Time will tell.