How often late closing happens with IP?

Hello TI folks,

I'm a first time home buyer and shopping around for a mortgage for IP's new home.
I'm expecting my close of escrow in 2.5 month from now on.

IP sales office staff told me that if I'm considering outside lenders, 98% of the other lenders did not close on time for them. So I may need to charge $400+ per day late fee. 98%???  How often does this late closing happen with IP?  How many days did you take for your escrow closing?

At the moment, I only looked at two lenders.  Builder's lender(OnQ) and Wellsfargo.
I read another thread that comparing OnQ and Wellsfargo and I read SGIP's very good advice choosing lenders at Stonegate. It was really helpful to me. Thanks!
As other TI folks said, Wells offered me a good rate for 30 year fixed Jumbo loan. I haven't got an offer from OnQ yet but if the offer from Wells is much better than builder's lender, should I really consider "98%" warning from sale's office?

And I just heard radio ads that Citi bank's home mortgage provide "on time closing guarantee". I don't know what that is but does anyone have experience of using Citi's mortgage?

Thanks in advance!
 
I would at least look at third party lenders.  Didn't have a great experience with On Q. 

There is also a date on which you have to designate the third party lender in your contract.  I don't know how stringent that clause is but it's there.
 
I don't think outside lender closing late (unable to fund on or before the closing date) 98% of the time is accurate.  I don't have the statistic but quite a few people I know using outside lender and work out just fine.

Wells Fargo is one of IP's preferred lender too.  They cover Marigold and other smaller IP's homes.  From my limited experience, Wells Fargo's fee and rate are about the same as OnQ's, but I like Well Fargo's service a lot better.  Since Wells Fargo is one of IP's preferred lender, they should be very experience in dealing with IP and they shouldn't have any problem with not closing on time.

You also need to be on top of IP regarding to the Close of Escrow date.  Due to construction delays, they often push back the date.  This might become a problem if you lock your rate too early and the lock period expired before the COE date.



 
I used an outside lender and closed 2 weeks late.  IP's contract says they reserve the right to charge you a late fee, if they see you are making a good faith effort to close, they usually won't charge you.  I kept IP informed of all the things that are preventing me from closing and they threatened me with charging the late fee a few times, but as long as you're not intentionally delaying closing, they'll be understanding about it.  Your mileage may vary, of course, it's been two years since I closed, so I'm not sure if IP has tightened up on this policy.
 
I used the other lender as leverage to get the builder'd preferred to play ball.  They came in an matched the rate so it will now be easier to close with them without any hassle.  They will not charge you if it's not your fault for delays.
 
gaogi said:
I used an outside lender and closed 2 weeks late.  IP's contract says they reserve the right to charge you a late fee, if they see you are making a good faith effort to close, they usually won't charge you.  I kept IP informed of all the things that are preventing me from closing and they threatened me with charging the late fee a few times, but as long as you're not intentionally delaying closing, they'll be understanding about it.  Your mileage may vary, of course, it's been two years since I closed, so I'm not sure if IP has tightened up on this policy.

Thanks for sharing. If you don't mind, can you tell me what the reason of delaying was?
 
akirvine79 said:
gaogi said:
I used an outside lender and closed 2 weeks late.  IP's contract says they reserve the right to charge you a late fee, if they see you are making a good faith effort to close, they usually won't charge you.  I kept IP informed of all the things that are preventing me from closing and they threatened me with charging the late fee a few times, but as long as you're not intentionally delaying closing, they'll be understanding about it.  Your mileage may vary, of course, it's been two years since I closed, so I'm not sure if IP has tightened up on this policy.

Thanks for sharing. If you don't mind, can you tell me what the reason of delaying was?

I'm trying to forget that part of my life, because it was so painful, but from what I can remember:

- My W-2 numbers didn't match what my employer provided in the employment verification because either the EV or W-2 included extra income like employer health insurance allowance or some thing like that.
- IP wouldn't provide a final sales price to the lender until all materials were ordered, even thought I had already completed my design center tasks a month earlier.  No sales price = no loan amount = no loan.
- IP wouldn't/can't provide the lender a final certificate of occupancy, they would only provide a job card.  Took a few calls to the lender to convince them to accept.

 
I had a horrible experience with OnQ.  All my neighbors who used them said the same thing.  Bill Kelso is a smooth talker and a very personable and knowledgeable guy.  The rest of his staff are clueless. 

The only positive out of the experience was that the delay of closing was OnQ's fault so IP pretty much didn't care what was going on. 
 
As noted, when the selling staff talks about the boogieman under the bed (outside lenders  >:D close late and you'll be charged....) odds are you're not going to be charged as long as you keep everyone up to date.

I've closed a recent IP deal 3 days beyond the COE, and the buyer wasn't charged a late closing fee. The reason? Their HOA Management Company wouldn't cooperate in getting project approval documents. Once they arrived  (late), they were in such a mess that well over 1,000 additional documents were required (phase releases, insurance bonds, etc). We'd ask IP for insurance, they'd refer us to the HOA Management. HOA Management would refer us to the Insurance Company. The Insurance Company said they weren't insuring the phase we were talking about, so check with IP.  :eek: IP isn't sending a man to the Moon, but you would think they were with the convoluted way they have structured their phase releases. The HOA data can eventually be figured out by a professional Underwriter, but it's a question of providing the documents early on.

If you're A) Buying a Condo, and B) shopping for a rate, and Lender XYZ gives you the "deal of the century" know that you are probably going to close late because of the HOA approval process.
 
jmoney74 said:
How much incentive is IP giving to use their lender?

Hmm...  Nothing I've heard so far.  They just said, if I use their preferred lender, I won't be charged late closing fee in the case of late closing. 
 
jmoney74 said:
Last time I checked at PS.. they were giving $1K credit to close. 

Currently IP don't give incentive for using their preferred lender but their prefer lender like OnQ might give you $1000 to $1500 at closing.
 
Soylent Green Is People said:
As noted, when the selling staff talks about the boogieman under the bed (outside lenders  >:D close late and you'll be charged....) odds are you're not going to be charged as long as you keep everyone up to date.

I've closed a recent IP deal 3 days beyond the COE, and the buyer wasn't charged a late closing fee. The reason? Their HOA Management Company wouldn't cooperate in getting project approval documents. Once they arrived  (late), they were in such a mess that well over 1,000 additional documents were required (phase releases, insurance bonds, etc). We'd ask IP for insurance, they'd refer us to the HOA Management. HOA Management would refer us to the Insurance Company. The Insurance Company said they weren't insuring the phase we were talking about, so check with IP.  :eek: IP isn't sending a man to the Moon, but you would think they were with the convoluted way they have structured their phase releases. The HOA data can eventually be figured out by a professional Underwriter, but it's a question of providing the documents early on.

If you're A) Buying a Condo, and B) shopping for a rate, and Lender XYZ gives you the "deal of the century" know that you are probably going to close late because of the HOA approval process.

Thanks SGIP. Sounds like escrow closings for condos are more complicated than SFRs?    Do you know the same complication applies to IP's detached condos?  Obviously, IP treats small lot detached homes as SFRs but technically they're (detached) condos in the legal documentation, so just curious about that...
 
The attached condos take longer because of all that paperwork.  Detached condos run like SFRs.. so they don't need to do anything.
 
AKIrvine79 - The knowledge base on attached / detached condos depends on the lender. Some are Fannie Mae/Freddie Mac seller servicers. Other lenders sell to Freddie Mac exclusively. Freddie Mac treats a condo as a condo, no matter if it's detached or attached.  Layer on top of that the second HOA, phasing issues, and insurance questions and things can spin out of control fairly quickly for a few companies out there.

In the broader picture, the refinance mortgage market is dead. There are still 10,000 loan officers and support staff needing a steady paycheck. Many of these companies that ran thousands of refinances through their systems each month now can't get the phone to ring. This means they've got to push their loan officers out of the next and into the purchase market. The companies may have terrific rates (quoted....) but can't figure out how to correctly structure a purchase (strike 1) a condo (strike 2) or a new construction transaction (strike 3).

I get how important it can be to get a low rate. It's nice to know you've got a great deal. It's also just as nice to get the home, on time, with minimal hassle. If you're shopping for financing, I'd ask what documented percentage of purchase loans the loan officer's closed in the past 90 days compared to refinances. That will tell you if you'll get not just a good deal, but a smooth sailing one as well.

My .02c
 
Soylent Green Is People said:
AKIrvine79 - The knowledge base on attached / detached condos depends on the lender. Some are Fannie Mae/Freddie Mac seller servicers. Other lenders sell to Freddie Mac exclusively. Freddie Mac treats a condo as a condo, no matter if it's detached or attached.  Layer on top of that the second HOA, phasing issues, and insurance questions and things can spin out of control fairly quickly for a few companies out there.

In the broader picture, the refinance mortgage market is dead. There are still 10,000 loan officers and support staff needing a steady paycheck. Many of these companies that ran thousands of refinances through their systems each month now can't get the phone to ring. This means they've got to push their loan officers out of the next and into the purchase market. The companies may have terrific rates (quoted....) but can't figure out how to correctly structure a purchase (strike 1) a condo (strike 2) or a new construction transaction (strike 3).

I get how important it can be to get a low rate. It's nice to know you've got a great deal. It's also just as nice to get the home, on time, with minimal hassle. If you're shopping for financing, I'd ask what documented percentage of purchase loans the loan officer's closed in the past 90 days compared to refinances. That will tell you if you'll get not just a good deal, but a smooth sailing one as well.

My .02c
+1 and that is why good service can be priceless and worth paying a little extra for.  You can always refi to a lower rate later.  I for one want certainty of closing for my purchase loan. 
 
If it's the builders fault, late closing fees are waived. If it's the HOA's fault, late closing fees are waived.

If it's the buyer's fault (didn't provide tax returns, or arrange correct insurance) or the lenders fault (sent loan to investor 1 who failed, then repackaged to investor 2 and waiting for approval) then it's likely going to be charged.

If you've got a unique lending situation - self employed and you need your 2013 returns validated by the IRS to count the income for qualifying - it's a question of letting the builder know up front. My guess is that either something was not disclosed so being charged is completely warranted, or this is just more of a scare tactic than anything else. $2,000 already (at $400 per day) means to me that this buyer exceeded a grace period (usually 2-3 days) and there could be an unsolvable problem, again if it's more than just a scare tactic by sales staff.
 
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