Washington state lenders pull funding for house sales at last minute

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With a baby on the way and years of savings in the bank, Phil and Sandy Hart made an offer last summer on their first house, a cozy three-bedroom in Shoreline.

The lender had approved the loan, the closing documents were signed, and the Harts were in the midst of moving preparations.

But the day they packed the moving truck, the lender pulled the loan, without giving a reason. Instead of enjoying their new home, the Harts had to stay in their apartment, and they lost more than $5,000 they’d spent on repairs and carpet for the place they thought they had purchased. They were able to recover their down payment, which was in escrow.

If this sounds like a rare homebuyers’ nightmare, it’s not. In today’s market, nervous lenders are scrutinizing buyers as never before. They’ve not only tightened loan underwriting standards; many lenders now also check on employment and credit right up until closing. Sometimes the tight rules delay the process. In other cases, funding doesn’t go through at all.

http://www.bizjournals.com/seattle/print-edition/2010/11/19/washington-state-lenders-pull-funding.html?ana=e_ph