changing in contract

NEW -> Contingent Buyer Assistance Program
Graphix- what does the clause in the purchase contract for any lending guideline changes mean? i read it but that doesn't give them the right to rearrange the contract and leave out stuff that they promise right? i mean paying for you hoa for 2 years is a lot better then having your rate reduce .125% right? or some other weird gimmick.
 
jbatzmaru,





Sorry if I was a bit too sarcastic before. I tend to be that way, in case you haven't noticed.





In your purchase contract, it will state something along the lines of: If you do not have loan approval, at any time during the escrow, and/or prior to close, then this contract becomes null and void. Lennar will not be responsible for loan approval or guarantee of any loan approval. Lennar also, will not be responsible for any changes in lending guidelines/rates/job changes/or any changes in your loan application, and/or any ridiculous statements made by Gary Watts. Please ignore him, because we supplied him with the kool aid, so we know.





So.... since the lending guidelines changed, i.e. Fannie will no longer approve a loan where the seller (Lennar) is paying for HOA dues, then they are no longer responsible, and your contract could be and/or will be considered null and void. The idea that the HOA dues being paid may be part of <em>your</em> contract, but the loan approval part of the contract super cedes it. Ask a judge, I am sure he/she will say, sorry... but your contract states all parts of your contract were/are contingent of loan approval, and <em>you</em> no longer have a loan approval as the contract was written. This isn't Lennar's fault, it is the fault of the idiots who ruined lending, and now it is <em>you </em>who doesn't qualify.





What do you do now? Ask yourself how long you will really live there on a monthly basis, then calculate what that $7800 is on a monthly basis to recover it. Get Lennar to drop your payment, so that the difference is what it takes to recover the $7800 on a monthly basis by how long you plan on keeping the loan.





It can be done, but you need to be smooth about it. If you start to mention the contract, that <em>you</em> no longer qualify for, then you will get no where. I look forward to hearing what you were able to do.



 
<p>Is the contract contingent on qualification? Usually such contingencies in Florida are very weaselly and you have to not-qualify right away, or use their lender, or some other clause that turns the contingency to uselessness.</p>

<p>By the way, in hard times it is possibly to have the preprinted terms in a contract, even a horrible developer's contract to be amended by Addendum. It's too late for you, but not for others reading this.</p>

<p>In good times they won't change one word.</p>

<p>In Florida, typically the contingency means that if you don't qualify, you get your money back, and everybody goes back to where you were before you signed.</p>

<p>I agree with the others in this posting, they don't want you to walk.</p>

<p>Just having them hand you a check back for the relevant amount would probably be regarded as fraud on the lender. Not a good thing to do in these times, altho it's hard to see why a sum this small would be pursued. Getting money back was done to the tune of a hundred thousand or more in Florida, and some of these people, probably less than 5% are being prosecuted.</p>
 
I think that I read someone suggesting that Lennar "give back" the 7800 at the close of the transaction... see the amendment to Purchase Money Transactions at 103.01 in the link that Grap added... they might not be able to do the old "cash back" routine anymore. Personally, I wouldn't take any buy downs right now... its seems that it would be really easy for the lender to "win" with Chiicago futures factoring in a 100% change of a fed reduction at the end of the month...and I know that jumbos don't react in the same way as they did 2 years ago... but it still creates a financial fudge factor in favor of the lender.
 
Graphix- i already qualify and everything is set. just that the lender is saying that they can't pay for my hoa for two years. they said that they can do other stuff with the money but paying the hoa is a no go right now. money still there to be use for other things. they are all working on it right now and they will get back to me on monday. so we will see.
 
<p>$323 bucks a month is not chump change. If you are all ready budgeting to afford the house, this could be a deal breaker. I like the idea of the cash kick back after closing, then you can just bank the $ and subtract 323 out every month as if they paid it. BUT you wiIl now be paying prop taxes on the extra $7800, and taxes on the interest it earns while in the bank. </p>

<p>I'd go for a 10K reduction first, then 7800 kick back. </p>
 
good. glad to hear that part... i went in today to lennar to renegotiate and i was told upfront i can't have prepay HOA... so they know it and not trying to trick anyone. they just didn't know when you signed... i think you are out of luck trying to fight them over it. just see where else you can spend the money best... it sucks, but that's what it is...
 
quick updated.... UAMC has agree to make an exception for my case. but i am still mad cause of the fuss they created.... and i told them that today the rate is lower and that i wanted to relock the rate at a lower rate. they told me that if i do that i will lose my exception to the HOA prepayment. so i spent 12k to buy down rate to 5.5 on 12/18 and now it only cost 7k to do the same. losing out on 5k. i am super pissed that i lost out on the funny money but still money. told them to credit me with a best buy gift card. i tried buying down more and lowing the price... that is a no go right away. it is too late to change anything since i am closing in 10 days. but i am sure they might be able to add and addendum to the contract for a best buy gift card of 5k. lets see what they come back with.
 
UPDATE.....



Get this.... i am so pissed off with UAMC right now that i am about to break off the deal. They knew about the fannie mae changes on 12/5 but they did not tell me until 1/5/2008. bottom line is that lennar is holding the line. they even went so far as to offer me my deposit back less any 3rd party fee. i don't know how much that is yet but the seller is looking into that for me.



any ideas? i am leaning toward taking the money and leaving. The sales agent said that lennar is not making a single cent on this deal. he said that net net the place is only 387k after everything but i am sure he is lying... can anyone verify this? the land cost of that little square area was recorded at 148k. and i figure 191 per sqft would equal to 231k. but i am sure lennar can build house for cheaper then 191 per sqft.
 
<p>I think you need to figure out whether you want the house or not, regardless of the HOA payment. You can probably squeeze a little more out of Lennar but it does not look like much more. If the house is good and you really like (the only good reasons to buy), try and get as much as you can and get the place. If the HOA thing is a real hold up for you, then walk.</p>

<p>$191 is fairly high but not out of the realm of possibility. I think when we do analysis for loss, $150-190 per square feet is what we use (depending on the house). Lennar has already paid for the land and the labor/material costs so the underlying cost for the house is already there. What the agent does not tell you is that it costs Lennar more money just to hold on to it because it has to pay the taxes, the maintenance fees, and the interests on the loans that it took out to build the house. </p>
 
jbazt - i believe i read in the portola springs manzanita thread that the hard costs (labor and materials) to build the homes there was about 90 to 100 sq ft. The guy who wrote the info used to work for Richmond American who is the builder for manzanita. Im not sure what the soft costs would be, but cant imagine it would be anywhere near the hard costs on a sq ft basis.
 
Irvine Commuter- Lennar has agree to the orginial term and give me an exception and pay for my hoa. i lose out on the lower rate cause i locked in on 12/18 and it cost me 12k to buy down to 5.5% but now it only cost me 7k to buy down to 5.5% so i am out 5k. i try to get that 5k in a form of a best buy gift card but they said no way. so they offer me my deposit back less any third party fees. so the ball is now in my court.
 
<p>That is a little harder to justify since you did lock down your rate early. I mean it would not be fair if Lennar came back and ask for more money if the rates had gone up. I think the 5K is more legit for Lennar to claim than the 7K that they promised you. I think that is why they made the exception. To me, you are basically getting the same deal as you would have on December 18, 2007, a time you committed to purchasing the property.</p>

<p>Sorry to rain on your parade but just trying to give you my honest opinion.</p>
 
I don't want to rile you up but... I can see why they won't budge on the buydown change. When you lock in a rate this is one of the risks you take. They conceded the HOA exception which was good of them to do as I'm sure legally they weren't required to do this. However, now you are making a new request due to something caused by lowering interest rates which was forseeable at the time you locked down. They probably are wary that you are going to try and nickle and dime them to death. Don't get me wrong - it's still a falling market as far as I'm concerned and it wouldn't be smart to buy without getting a deal but I can see their point of view too.
 
NewToOC.... you can relock your rate anytime you want. you can and it is possible. don't believe them. i have worked in the loan industry. the only reason they don't want to is that they lose money. since they got you in a higher rate. i use to do second and third loan and it was a shady business and i known people who qualify for say 9% but we told them no you only qualify for 15% and that was that. they had no idea what they can qualify for and i am sure they didn't care cause they weren't going to pay it back.... everybody knew except for the banks and the investor. well maybe they knew also but they were playing pass the bag and see who would be caught holding it when the music stop....... tax payer?
 
jbatzmaru - yes, I agree its a question that they don't want to do it vs. not being able to do it. It sounds like though if they are telling you that you can have most of your deposit back that they are done negotiating. Of course I'm a terrible negotiator so who knows :)
 
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