Loan Contingency-Multi-Unit - Posted by Edwin

import · May 19, 2009, 9:39am

Posted by Edwin on May 22, 2009 at 13:10:08:

Thanks DMcGehee, I am interested to hear what you find from your friend.

import · May 19, 2009, 9:39am

Posted by Edwin on May 19, 2009 at 09:39:56:

I’ve heard horror stories about lenders who have already committed and approved loans, backed down from their commitments on the very last day of closing leaving the buyer on the hook for the deposit. Although, I have heard this occurring in the residential side, I haven’t heard this occurring in the commercial side, but it seems that it’s very possible. What’s the safest way to write this contingency in in the sales contract, and will the sellers accept an offer with this type of contingency? How practical is this contingency in today’s financial markets? Thanks.

import · May 19, 2009, 9:52pm

Re: Loan Contingency-Multi-Unit - Posted by DMcGehee.SF

Posted by DMcGehee.SF on May 19, 2009 at 21:52:04:

It certainly happens on the commercial side. A friend of mine, who is very experienced and has a strong reputation just had it happen.

The bank initially told him that he had to bring over additional deposits (his personal accounts were at a different bank) in addition to the property account they initially agreed on. Then after he agreed to that, the lender then got cold feet and cut back the loan amount. Two weeks before the close the lender backed out.

He instantly called up some of contacts in the lending industry and was able to arrange interim financing until permanent can be obtained.

I will ask him what kind of financing contingency, if any, he had in the contract.