One of the most stressful periods in any homeowner’s life is the few days and weeks leading up to the closing of the real estate sale and the funding of the mortgage. The hectic nature of this process makes it far more likely for borrowers to feel rushed and stressed out and makes it much easier for banks, mortgage brokers, real estate agents, and title companies to overlook certain aspects that will later harm the borrowers.
In fact, many homeowners have reported that the terms of their mortgage changed between the time they were quoted their loan and when the closing was finally done. While some differences will be reasonable due to changing conditions, borrowers have been given adjustable rates instead of fixed, sold homes that did not pass inspection but were not told until too late, or had to bring more money to close than they originally thought.
Whether these are honest mistakes or simply methods that the bank, lawyer, or brokers use to increase their fees and commissions at the last second is debatable. But closings are usually rescheduled a number of times. By the time the closing is really scheduled, everyone seems rushed and homeowners are told to sign dozens of pages of contracts, notices, and disclosures.
Also, almost everyone else is present at the closing except the mortgage broker. The Realtor, lawyer, and closing agent will be present, but the most important person, the one who sold the owners the mortgage, is usually not there. This means that if the terms had been changed without the borrowers’ knowing about it, or mistaken documents were sent, it is likely no one would catch it or care even if they did.
The one person who might be able to answer any questions is the title agent, who receives all of the paperwork and instructions for the closing directly from the mortgage company. But closing agents have been held liable for statements they make about the loan, so most have stopped making any statements about them at all. They instruct the borrowers to sign and attempt to appear as busy as possible until the closing is done.
And after all, the title company that usually handles the closing does not get the instructions from the lender until the day before or the day of the closing itself. Despite laws stating that the final settlement statement should be available for the borrowers’ inspection at least 24 hours before closing, this does not always happen in real life. Again, everyone is rushed and the owners will not even know how much money to bring to close.
The entire process makes it so much easier for slight changes to be made to the terms of the real estate transaction or mortgage without the new owners being aware. And from the shared experiences of many borrowers, it seems that this was too often the case. In all the of the rush of trying to get the loan closed, new owners did not even notice the changes and were certainly never given the time to read all of the documents that are now being used against them to take their homes.