backing out of a deal

[Heidi D.]

Hello all, here's my story:

Ok I'm a 22 year old Navy Sailor with a disabled husband and a 15 month old son. I am getting out of the military in 2 months. In February, I decided to start looking for a house in Louisiana. I decided to go the MH home route because it seemed so much cheaper and easier than buying a house.

Anwyay, we find a singlewide that we like at LUV Homes (A Clayton dealer) and she says price is 36,900 plus cost of land and improvements, which came out to 54,000 all together. Neither of us had great credit (I had a 605 and DH had a 660) and we were unsure if anyone woudl finance us. She offered to run our credit and see if Vanderbilt would. Well, lo and behold, this being the day before we leave to go back to VA and we're anxious to have somethign in stone, she calls on my cell phone and says yeah congrats they approved you! I was out eating with my brother and sister-in-law and husband and said thank you and hung up. Anyway, next day before we leave we go see her and she tells us the interest rate is 10% which is the best we are going to get with our credit (Vanderbilt mortgage, of course) and that our payment would be $497/mo and downpayment would be $2500. We accepted it and came back to VA and began pinchign our pennies to save up for the down payment. Meanwhile it occured to me that she hadn't told us any of the details of our loan, so i tried on severeal occasions to get in contact with her but she was all of a sudden unreachable. I finally had to tell them that my command wanted this information and I needed it immediately and taht she ahd to call me back wherever she was or atleast give someone else authorization to look at my file.

Anyway, we are told that if we can't make it back to LA for the closing, we can just refinance it again to close when we are able to come down. We start getting a funny feeling about it, especially since we can't seem to get any information about our loan or closing or ANYTHING. Well, I was reading here and discovered that 10 percent is an outrageous interest rate, even for people with low credit, and I had been working on my credit and it is now at 640. I decided to apply for a loan through my credit union (navyfed) as i was unable to make the down payment and i was realizing that 500/mo was going to be hard going to school with no job and a disabled husband and son. Well when I applied for the loan (about a month later) I called the poeple we bought the land from to see if we could possibly put a doublewide on the land instead because my bank wouldn't finance a single wide. She said sure no problem. I call my agent and it turns out the land lady had called her and gave her a heads up about my questions. She says ok your bank will finance, fine, i understand you cant make the down payment or afford the note. (My bank's note, with a 10,000 more expensive home would fo only been $375) The next day I get a call from her saying that they already did the appraisal on the house and that was $400 and lawyer fees were $1300 and will my new loan cover it? Well Navy Fed said they would use their appraisal. Anyway looks like things are going well until the bank and LUV homes get together talking and have an argument. NavyFed requires it be on the land by closing, and LUV wont put it on the land until after the loan is closed. Apparently, they want a loan like a construction loan and my credit union wont do that. They never told me this before. Great, so the loan got rejected. Now LUV homes wants all this money, when I never even signed a buyer agreement or closed or ANYTHING. Like I said before, I am getting out of the Navy in 2 months and they woudl completely wipe out my savings and me and my family would be homeless. Does ANYONE have any advice? can they really do this if we didnt sign a buyers agreement or close?? HELP??!

[Pendragon]

Lot to read there.

If you didn't sign anything, you don't owe anything, and the dealer doesn't have a leg to stand on.

After reading it again though, it sounds like you did accept the loan (why would you do that when you knew you didn't have the down payment?).

They are required by law to disclose the details of the loan BEFORE you sign, and AGAIN before you close. This is called 'RESPA', I think that's the right acronym. Basically it's a truth in lending disclosure that details everything about the loan you are about to sign for. Interest rate, payments, what's being borrowed, paid, costs, everything, it's about 2 legal size pages of very small type.

If the bank (the real one) will finance you, what you can do (and I would not recommend unless you HAD to) is work up and agreement (in writing) with the dealer to use your land as security for the setup ('construction' phase). When the home is completed, the land is given back to you, essentially the dealer will be selling you the house AND the land.

That being said, it sounds like this dealer is being very dishonest, and I wouldn't sign a snickers bar over to them and expect to get it back.

If you are considering going through with the dealer loan and then refinancing with your bank, make sure IN WRITING, that the bank will refinance you with the new loan, or you may be stuck with it.

As far as your land, DO NOT LISTEN TO THE SELLER!
Call the Zoning and Planning board for the area you are in, give them the property information and ask the people that must approve it whether or not you can put a mobile home there!

My local Z&P told me quite a few horror stories of people all set on a mobile, financed, documents signed, money exchanged, only to find out when they go for the permit that they cannot put a mobile home on the property.

A dishonest (or uninformed) dealer will be happy to sell you a home without questioning where you are going to put it. Once you sign the documents, you owe/own the home, whether you have a place to put it or not!

[Heidi D.]

We were saving money for the down payment and thought we would be able to make it but we had unexpected expenses mid-way (of course, don't things like this always happen?) Navy Fed offered us a no-down payment Veterans Choice loan (which is comparable to the VA home loan) with a 6% interest rate.

When I called the people we were buying the land from, she said they were already laying the dirt for the home, and laying it facing the wrong way, no less! (lengthwise instead of width wise). It seems funny that they wont put the house down by closing for Navy Fed to finance it, but they sure were doing all of this when Vanderbilt was financing it.


I am just wondering, since we didnt sign an intent to buy or close on the mortage, do we have to pay these fees she's saying we have to pay? I mean, what happens when anyone else decides to go with a home and can't make the down payment? Do they do this to everyone? With all the laws I've heard of to protect people buying manufactured homes, this seems to have slipped through the loop. Especially since most down payment assistance can't be applied to MH's.

[rmurray]

Ouch..ouch..just what money are they demanding....how much and what for.....I understand why they need a consturction loan...With a proper loan committment the dealer should be able to find this loan....Call the manager of the store..ASAP..Tell him/her about your problem...Ask for the distict managers name and number..Call them a well..Call the home office in TN..Ask for Kevin Claytron..he is the president orf the company....Do not give in....

[Kevin C]

I would suggest youu go to the legal office at the base where you are stationed. They can give you legal advice, but can not represent you.

[Heidi D.]

They're demanding the money for the title search, lawyer fees, appraisal, etc., over $2,000. I talked to my dealer today and she told me someone has to pay it and she's going to lose her job over this if I don't. She says she's never had someone back out of the deal before closing. What a mess!

Kevin, I plan on going to Navy legal tomorrow. Hopefully they can help. I appreciate all of your help!!!

[jgn]

If you didn't sign anything and she ordered the search and appraisal without your authorazation than she should get fired. If she has never had someone back out of a deal than think what her second week on the job will bring.

[rmurray]

These fees would NOT be over $599 tops.....She lied about never having a cancelation..Those of us in the business more than a month all have had cancellations at this stage of the purdchase..we all have had folks back out right in the attorney's office....If this person lied to her bosses and ordered services without your expressed permisssion..she should be fired...If you feel sorry for her...I will e-mail you an address to send a check too for others in need...If you are not comfortable..BACK OUT NOW...

[Heidi D.]

I didn't buy her never having anyone backout. She told me this was serious business that I couldn't take lightly. Then offered to get me a loan with someone else with no down payment. I said no to it all and that's when I got the "I'm gonna get fired!" sob story. Sound like she messed up, right? She wouldn't get fired because of me?

[Heidi D.]

Honestly, after all this trouble, I don't care if she gets fired. I just don't want to fork over $2,000.