GMAC Mortgage Frauds

 Looking for help and also giving a warning about GMAC and their
mortgage practice.
The short version is I purchased a house for $600,000. I was getting a
100% mortgage from GMAC. GMAC sent me paperwork stating the house had
to meet or exceed $600,000 before I could get the loan.

Everything went fine, or so I thought, until a day before the closing.
GMAC said they had trouble with the comps. Which they previously said
they had no problem with.

Suddenly, they were saying they couldn't find comps in the area and the
house may not comp out. I told them if it doesn't then I don't want it.

On the day of the closing they called to say the house comped out at
$600,000 but they needed more assets. They said if I didn't give them
assets that I could lose my earnest money of $30,000. So I gave them
the information.

My contention is that they approached the seller, who will not talk to
me, with the lower comp. He wouldn't go for it so after the GMAC
underwiriter got more assets from me he decided the house now comped
out at $600,000.

Any ideas how to prove this and what can I do with it?

  On 23 Sep 2005 13:01:12 -0700, sdamico99@hotmail.com wrote:


What does "got more assets from me" mean?

 What did you expect? It's General Motors.

 sdamico99@hotmail.com writes:

Normal practice.


That's lame timing.  But sadly, not terribly unusual.


Your mortgage contingency in the offer (assuming there is one)
probably applies here of course, protecting you.  IF the lender backs
out, you get to back out.


Wow that's a lot of earnest money.

Most contracts I've seen around here stipulate that you have to make a
good faith effort to secure the loan and provide the mortgage company
with info they need to secure the loan.

Hence it's always in a buyers interest to do their homework before
signing an offer contract, because once this machinery is motion, the
mechanisms are in place to make sure you don't get cold feet.  If you
were the seller here, how pissed would you be if the buyer bailed in
the 11th hour?   Evidently they have stipulated that they would be
$30k pissed.


I am not a lawyer, but I'd strongly suggest you talk to one who
specialized in real estate transactions if you're looking to bail on
this deal.  You're pretty far along in the process to get cold feet,
and a seller would be pretty motivated to rake you over the coals for
screwing around with completing this transaction.

Personally, I think it's much more likely that GMAC was willing to say
"Okay, we'll say it's "worth" 600k, but we want more assurance that
this borrower is capable of repaying the loan and has some assets we
can go after if he defaults on this 100% loan."

It's all about risk management on their part and their ability to sell
the place for $600k in the event you defaulted is what they're
concerned with.    Market value might be 600k, but how quickly could
they turn around and sell it for that in case of default?  That's the
question.  Appraisal is a bit of an art.

I highly doubt they'd approach the seller for any reason.  It really
wouldn't be in the lender's interest at all to do so.

Best Regards,
--
Todd H.  
http://www.toddh.net/

 

Actually, I think the loan was iffy all a long, and it sounds
like they never got underwriting approval or a commitment letter.
It sounds like it went right down to the wire and was going to
be rejected had the buyer not pledged some assets (or put more
money down).

-john-

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John A. Weeks III           952-432-2708            john@johnweeks.com
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