Condition Issues Disclosed Must Be Fixed; Escrow Needs to Be Careful Too
We recently had a transaction come to a screeching halt b/c the escrow officer told our “funder” that there was a plumbing leak so she was crediting $1,000 to the buyer to cover the cost of the repair.
Escrow officers and Realtors can discuss things with the JVM Team (or their loan officers) off the record, but once information is in writing and it reaches a funder or an underwriter (or anyone on the “banking team”), it has to be addressed. And, once our funders or underwriters learn about needed repairs, they have to require that they get completed prior to close.
Not getting a known repair completed places a liability on the banking team (buyers can sue later on) and it could render a loan “non-salable” on the secondary market.
Most Realtors understand this, but it is important that escrow officers understand this too. This is a quick reminder for Realtors to share this information with their favorite escrow officers.
A few quick definitions:
A “funder” is the person who reviews the final loan package after documents are signed to make sure everything is in place and a loan is “salable” before wiring funds to escrow.
The “mortgage banking team” is everyone on the back end of the loan process – including the disclosure desk, underwriter and funders.
A loan must be “salable” on the secondary market so a mortgage bank can sell a loan to make money on the loan. Mortgage banks lose an immense amount of money if a loan is not salable.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167