We sold our home to a family that used First Magnus as their mortgage funder and 1st Pyramid Financial as their broker. We were making settlement on our old home and new home on the same day.
On the day of settlement the buyer's broker from 1st Pyramid Financial said that after all the settlement documents were signed, they had to be faxed to an underwriter at First Magnus for approval. My knowledge in these matters is limited, but from what I understand this is an uncommon practice. After a few hours of waiting, the broker said the loan was approved and the loan would be funded. This is also another uncommon practice. The Title Company said that most loans are funded just prior to the settlement.
This is where the real trouble began, and the people buying our house were forced to jump through hoops. The scenario below played out an unreasonable number of times for the next 2 days.
1) Wait for the loan to be funded by First Magnus.
2) Title company calls First Magnus asking where funds are.
3) First Magnus requests additional information from borrower.
4) Borrower supplies additional information.
5) Go to step 1 and repeat over and over for next 2 days.
After 2 days of having the borrower jump through hoops (sending on-line bank statement, send copy of monthly bank statement, send copy of bank statement directly from bank, etc.) we were in danger of losing OUR new house that we were supposed to make settlement on. The Title Company was going to send all contracts back to all parties. What turned things around was when I notified the Pennsylvania Banking Commision. Once First Magnus found out that the Banking Commission was requesting that the Title Company fax all documents to them, the funds were sent within an hour.
As I stated, I'm not an expert in this area, but..
1) Aren't loans supposed to be approved prior to settlement?
2) Aren't loans suppposed to be funded at settlement?
3) Aren't brokers supposed to be licensed in the state their operating in? The 1st Pyramid Financial Broker wasn't licensed in Pennyslvania.
Although we weren't the borrower from First Magnus, we sustained additional costs due to the manner they conducted themselves in this transaction. We incurred additional moving costs due to failed delivery attempts and over night storage charges. I rented a small UHaul for some of our items, and had to rent this for additional days. We wasted vacation days while the loan was in pending mode.
The Pennsylvania Banking Commission took up our cause, but the lender denied paying our additional expenses.
I understand that businesses sometimes makes mistakes. I have a high regard for businesses that quickly identify a problem and remedy it. This wasn't the case in this situation.
By the way, did I mention that my wife was 8-1/2 months pregnant at the time of settlement? Luckily the family is fine and in our new house. My advice to anyone buying or selling a home where First Magnus or 1st Pyramid Financial is involved, run to a more professional lender and broker.