changing in contract

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jbatzmaru_IHB

jbatzmaru_IHB

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If the builder makes changes to your contract 1 week before your closing, can you back out and demand your deposit money back?



Lennar is saying that fannie mae is changing their guidelines about builder paying HOA in advance and they want to change that in my contract. Does that sounds fishy or is that the truth?
 
<p>Read your contract, it will tell you who and under what circumstances the contract can be changed. Generally, seller make the contract fairly favorable to them so that they can make change unilaterally. </p>

<p>Also (assuming what Lennar is saying is the truth), there may be a clause in there about uncontrolled situations created by third parties. </p>

<p>Additionally, the issue would be whether the change is material in nature. If it is a minor change, you are not likely to be able to get out of it. If it is major (i.e. location of house or price change), you might be able to get out of it by claiming that it is not what you bargained for.</p>
 
they are saying that fannie mae won't allow them to pay for my hoa which is 2 years. 7752 dollars worth. i consider it a major deal breaker because it affects my monthly budget. i don't need anymore upgrade, i got everything already.



would that be consider a major contract change?
 
<i>"would that be consider a major contract change?"</i><p>

Well, let's see. Is $7752 major to you? I think it is fairly major in courts. What is the small claims court limit? Felony theft vs. misdemeanor? Do you think maybe they knew <i>"fannie mae won't allow them to pay for my hoa which is 2 years. 7752 dollars worth"</i>? Or maybe this is the first time they have dealt with fannie mae?
 
<p>Are they giving you something else instead i.e. something that worth $7752? </p>

<p>My thought is that a court is not going to consider the change to be "major". At most, the court will reward you the difference. Maybe you can ask for a difference in price or paying down more points. </p>

<p>Small claims court limit is $5000. </p>
 
don't know yet. they say they are willing to give me something. my rep at umac is talking with her VP and my sales contact is talking with her president to see what they can come up with.... but right now i don't need anything. price reduction is the only thing i will go for but it has to be enough where it reduce my payment down by 323 dollar. hahahhaaa that probably won't happen. but one can ask for it right?
 
<p>that would be a big deal to me - very big deal - It is like saying we just decided to raise your price by 7752. But, I have no clue about legality.</p>
 
<p>movingaround, it would be a big deal if the house was like $50K. A price increase of $7800 for a 600-700K is de minimis (1-2 percent). You would be taking a big risk to break the contract.</p>
 
<p>Ask them to buy down the interest rate, if they haven't done so already. If they have, ask them to buy it down more. They buy down rates all the time in Florida.</p>

<p>Whatever your rate is, they can buy it down 2 percentage points the first year one the second year, or 3, 2, 1, whatever mathematically works.</p>

<p>There is no logical reason for the lender to object to this, but maybe they will.</p>
 
they are offering that. but i bought it down enough. if i buy down more it will only reduce the payment by 100 dollars. it gotten to the point where you have to put in 8k just to reduce it down by .25% i don't think it is worth it anymore.
 
<p>Me suspects Lennar would be foolish to let a deal bust up over $7800, especially in this ridiculous market. Get a bona-fide price reduction and be ready to walk if they don't, and they'll see the light.</p>

<p>SCHB</p>
 
<p>why not demand reducing the purchase price by that exact amount? </p>

<p>don't breach your contract! or else the builder (as a lost volume seller) would be able to sue you for the profit they would have made on that plus any consequential damages, even if they resell the house to someone else right away (unless they would be willing to accept your deposit for their trouble, which I assume is not going to work for you). </p>

<p>Disclaimer: this is NOT a legal advice, nobody here is your lawyer, so pls do consult a RE contract lawyer.</p>
 
i agree with awgee they are pulling a bait and switch - how could they not possibly know this ahead of time?. they think that you are too far along in the process and that you wont back out. a 7K price reduction is not equal to 323 month. threaten to walk, socal is right, they wont let the deal fall through for 7800. if they do let it fall through, i think you would probably have a good shot at getting your deposit back through small claims. i bet you lennar would not even show up at small claims and you would win by default (not sure how much your deposit was though).
 
<p>And if they let it fall through, one party can always call the other the next day with change of heart. They will almost certainly do that and you could if the risk concerns you after sleeping on it.</p>
 
What about a $7800 credit back at signing, that can go right into your pocket? Put it in the bank and make your HOA payments from there.
 
i already have my lawyer working on this.



i don't think they will do that 7800 credit thingy. sounds a little fishy for the new loan standard. but who knows... lets see.



there will be no court. part of the contract. most likely if there is a dispute it will go to arbitration.
 
<p>I would recommend for you think twice about litigation. . . the lawyers are the only ones who win. </p>

<p>Try and see if you can recover the $7800 through some other method. </p>
 
Man... Don't you people read <a href="http://www.housingwire.com/">housingwire</a> or <a href="http://calculatedrisk.blogspot.com/">calculated risk</a>? Because, both reported on Fannie Mae making this change back in the beginning of December.





Here is the <a href="https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2007/0723.pdf">PDF document</a> for our more legal minded readers.





Sorry, but from what legalese I understand, this is a perfectly legit and newly implemented guideline by Fannie. And, I have met lawyers for homebuilders, and I can tell you, with 99.9% confidence, there is a clause in your purchase contract for any lending guideline changes.





Now, should have Lennar known about this sooner? Sure, but they didn't. They do not want to lose you, so tell them to drop the price to save you the amount you are losing out on.
 
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